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The following table contains monthly retums for Cola Co, and Gas Co, for 2013 (the retums are shown in decimal form, i.e., 0.035 is 3.5%

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The following table contains monthly retums for Cola Co, and Gas Co, for 2013 (the retums 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 55% invested in Cola Co. stock and 45% 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 relums of the pottiolio and computing its volatility directly. c. How do your results compare? a. Using the formula: Var(Rp)=w12SD(R1)2+w22SD(R2)2+2w1w2Corr(R1,R2)SD(R1)SD(R2) The volatility (atandard deviation) of the portfolo is \%. (Round to two decimal places.) b. Calculating the monthly returns of the portfolio and computing its volatility directly The volatilty (standard deviation) of the portfolio is X. (Round to two decimal places.) c. How do your results compare? (Select the best choice beiow.) Click on the following icon in order to copy its contents into a spreadsheet.)

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