Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 35%, while stock B has a

image text in transcribed
A portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 35%, while stock B has a standard deviation of retum of 15%. The correlation coefficient between the returns on A and B is 0.45. Stock A comprises 40% of the portfolio, while stock B comprises 60% of the portfolio. What is the variance of the portfolio? What is the Volatility of the portfolio? Please write your steps

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Elements Of Structured Finance

Authors: Ann Rutledge, Sylvain Raynes

1st Edition

0195179986, 978-0195179989

More Books

Students also viewed these Finance questions