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Your eccentric Aunt Claudia has left you $50,000 in BP shares plus $50,000 cash. Unfortunately, her will requires that the BP stock not be sold
Your eccentric Aunt Claudia has left you $50,000 in BP shares plus $50,000 cash. Unfortunately, her will requires that the BP stock not be sold for one year and the $50,000 cash must be entirely invested in one of the stocks shown below.
BHP Billiton | Siemens | Nestl | LVMH | Toronto Dominion Bank | Samsung | BP | |||||||||
BHP Billiton | 1.00 | 0.27 | 0.03 | 0.30 | 0.48 | 0.40 | 0.37 | ||||||||
Siemens | 1.00 | 0.34 | 0.17 | 0.12 | 0.33 | 0.28 | |||||||||
Nestl | 1.00 | 0.16 | 0.17 | 0.09 | 0.17 | ||||||||||
LVMH | 1.00 | 0.15 | 0.29 | 0.06 | |||||||||||
Toronto Dominion Bank | 1.00 | 0.20 | 0.23 | ||||||||||||
Samsung | 1.00 | 0.24 | |||||||||||||
BP | 1.00 | ||||||||||||||
Standard deviation (%) | 34.10 | 26.90 | 11.15 | 17.40 | 23.70 | 28.10 | 24.80 | ||||||||
a. Calculate the portfolio variance for seven different portfolios. (Use decimals, not percents, in your calculations. Do not round intermediate calculations. Enter your answers as a decimal rounded to 5 places.)
Portfolio Variance:
BHP
Siemens
Nestl
LVMH
Toronto Dominion Bank
Samsung
BP
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