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Business, 07.07.2020 20:01 Devan6264

The Clearwater National Bank is thinking about building a new branch. This new branch is anticipated to generate 5 percent of the business of the bank after it is opened. The bank expects the return for this branch will be 15 percent with a standard deviation of 5 percent. Currently the bank has a 10 percent rate of return with a standard deviation of 5 percent. The correlation between the bank and the new branch is expected to be -0.3. What is this bank's expected risk (measured by the standard deviation) after adding this branch?

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