Question
The statistics for the returns on the various components of a retirement portfolio are: Asset Allocation (w) Expected Return (E(r)) Standard Deviation () Correlation() Cash
The statistics for the returns on the various components of a retirement portfolio are:
| Asset | Allocation (w) | Expected Return (E(r)) | Standard Deviation () | Correlation() | ||
| Cash | Bonds | Stock | ||||
| Cash | 10% | 1.53% | 2% | 1.00 | 0.3 | -0.14 |
| Bonds | 10% | 3.66% | 3% |
| 1.00 | 0.26 |
| Stocks | 80% | 7.28% | 21% |
|
| 1.00 |
Calculate the portfolio variance.
Enter the answer as a decimal (with 4 decimal places).
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Principles Of Finance
Authors: Scott Besley, Eugene F. Brigham
2nd Edition
003034509X, 9780030345098
