Here are some historical data on the risk characteristics of Dell and McDonalds: Assume the standard deviation

Question:

Here are some historical data on the risk characteristics of Dell and McDonaldâ€™s:

Assume the standard deviation of the return on the market was 15%.
a. The correlation coefficient of Dellâ€™s return versus McDonaldâ€™s is .31. What is the standard deviation of a portfolio invested half in Dell and half in McDonaldâ€™s?
b. What is the standard deviation of a portfolio invested one-third in Dell, one-third in McDonaldâ€™s, and one-third in risk-free Treasury bills?
c. What is the standard deviation if the portfolio is split evenly between Dell and McDonaldâ€™s and is financed at 50% margin, i.e., the investor puts up only 50% of the total amount and borrows the balance from the broker?
d. What is the approximate standard deviation of a portfolio composed of 100 stocks with betas of 1.41 like Dell? How about 100 stocks like McDonaldâ€™s? (Part (d) should not require anything but the simplest arithmetic toanswer.)

Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...