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Data table The following table contains monthly returns for Cola Co. and Gas Co. for 2013 (the returns are shown in decimal form, i.e., 0.035
Data table The following table contains monthly returns for Cola Co. and Gas Co. for 2013 (the returns are shown in decimal form, i.e., 0.035 is 3.5% ). Using this table and the fact that Cola Co. and Gas Co. have a correlation of 0.0969, calculate the volatility (standard deviation) of a portfolio that is 50% invested in Cola Co. stock and 50% invested in Gas Co. stock. Calculate the volatility by: a. Using the formula: Var(Rp)=w12SD(R1)2+w22SD(R2)2+2w1w2Corr(R1,R2)SD(R1)SD(R2) b. Calculating the monthly returns of the portfolio and computing its volatility directly. c. How do your results compare
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