Question
Using the data in the following table, and the fact that the correlation of A and B is 0.41, calculate the volatility (standard deviation) of
Using the data in the following table, and the fact that the correlation of A and B is 0.41, calculate the volatility (standard deviation) of a portfolio that is 50% invested in stock A and 50% invested in stock B.
| Realized Returns | ||||
| Year | Stock A | Stock B | ||
| 2008 | 9% | 22% | ||
| 2009 | 18% | 27% | ||
| 2010 | 10% | 3% | ||
| 2011 | 10% | 3% | ||
| 2012 | 2% | 10% | ||
| 2013 | 12% | 23% | ||
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
Financial Management Principles And Practices
Authors: Timothy J. Gallagher
9th Edition
1954156103, 978-1954156104
