Question
Using the data in the following table, and the fact that the correlation of A and B is 0.45, calculate the volatility (standard deviation) of
Using the data in the following table, and the fact that the correlation of A and B is 0.45, calculate the volatility (standard deviation) of a portfolio that is 70% invested in stock A and 30% invested in stock B. (Click on the following icon in order to copy its contents into a spreadsheet.)
| Realized Returns | ||||
| Year | Stock A | Stock B | ||
| 2008 | 6% | 30% | ||
| 2009 | 19% | 35% | ||
| 2010 | 7% | 2% | ||
| 2011 | 4% | 5% | ||
| 2012 | 2% | 7% | ||
| 2013 | 13% | 24% | ||
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Fundamentals Of Corporate Finance
Authors: Stephen A Ross, Randolph W Westerfield, Bradford D Jordan
7th Edition
0073134295, 9780073134291
