Question
a) Jack Jones has a two-stock portfolio with 45% invested in Stock A. The variance of Stock A is 0.09 and the standard deviation of
a) Jack Jones has a two-stock portfolio with 45% invested in Stock A. The variance of Stock A is 0.09 and the standard deviation of Stock B is 18%. The covariance between Stock A and Stock B is 0.23. Calculate the standard deviation of the portfolio. (3 Marks) Please provide your answer as a decimal to 6 decimal places.
b) Calculate the correlation between the two stocks. 4 Marks) Please provide your answer to 6 decimal places.
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Business Analysis And Valuation Using Financial Statements Text And Cases
Authors: Krishna G. Palepu, Paul M. Healy, Victor L Bernard
3rd Edition
0324118945, 9780324118940
