Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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% | 3.81% | 2% | 1.00 | 0.75 | -0.36 |
Bonds | 10% | 4.61% | 4% |
| 1.00 | 0.22 |
Stocks | 80% | 7.27% | 22% |
|
| 1.00 |
Calculate the portfolio variance.
Enter the answer as a decimal (with 4 decimal places). For example 0.0234412 = 0.0234.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started