Question
Consider the following expected returns, volatilities, and correlations: Stock Expected Return Standard Deviation Correlation with Duke Energy Correlation with Microsoft Correlation with Wal-Mart Duke Energy
Consider the following expected returns, volatilities, and correlations:
| Stock | Expected Return | Standard Deviation | Correlation with Duke Energy | Correlation with Microsoft | Correlation with Wal-Mart |
| Duke Energy | 14% | 6% | 1.0 | -1.0 | 0.0 |
| Microsoft | 44% | 24% | -1.0 | 1.0 | 0.7 |
| Wal-Mart | 23% | 12% | 0.0 | 0.7 | 1.0 |
The volatility of a portfolio that is equally invested in Wal-Mart and Duke Energy is closest to ________.
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Shape Up Your Finances
Authors: Ian Birt
2nd Edition
1925716422, 978-1925716429
