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The expected rate of return for stock A, stock B, and stock C are X%, 20%, and 14%, respectively. The risk (as measured by standard
The expected rate of return for stock A, stock B, and stock C are X%, 20%, and 14%, respectively. The risk (as measured by standard deviation of returns) of stock A, stock B, and stock C are 43%, 62%, and 52%, respectively. The correlation coefficients of returns between A and B is 0.26, between A and C is 0.19, and between B and C is 0.07. You form a portfolio by investing 22.50% of your wealth in A, 25% of your wealth in B, and remaining wealth in C. The expected return of your portfolio is 14.60%. What is the risk of your portfolio?
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