Using the data in the following? table, and the fact that the correlation of A and...

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Finance

Using the data in the following? table, and the fact that thecorrelation of A and B is 0.39?, calculate the volatility?(standard deviation) of a portfolio that is 70% invested in stock Aand 30% invested in stock B.

Realized Returns

Year

Stock A

Stock B

2008

?8?%

27?%

2009

17?%

28?%

2010

1?%

11?%

2011

?3?%

?2?%

2012

1?%

?3?%

2013

8?%

26?%

The standard deviation of the portfolio is _%?

Answer & Explanation Solved by verified expert
4.5 Ratings (716 Votes)
SD of Stock SQRT Sum X Avg X2 n AVg SUm Ret n Avg A 8 17 1 3 1 8 6 16 6 267 Avg B 27 28 11 2 3 26 6 87 6 145 SD of Stock A Year Ret X X Avg X X Avg X2 2008 800 01067 00114    See Answer
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Using the data in the following? table, and the fact that thecorrelation of A and B is 0.39?, calculate the volatility?(standard deviation) of a portfolio that is 70% invested in stock Aand 30% invested in stock B.Realized ReturnsYearStock AStock B2008?8?%27?%200917?%28?%20101?%11?%2011?3?%?2?%20121?%?3?%20138?%26?%The standard deviation of the portfolio is _%?

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