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Please help me find the votality by using that formula! The following table contains monthly returns for Cola Co. and Gas Co. for 2013 E
Please help me find the votality by using that formula!
The following table contains monthly returns for Cola Co. and Gas Co. for 2013 E (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 60% invested in Cola Co. stock and 40% 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. The volatility (standard deviation) of the portfolio is \%. (Round to two decimal places.)Step by Step Solution
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