Three portfolios are created using shares of Stock A and Stock B. The table below provides the proportional value of the two stocks in each portfolio, as well as the volatility of each portfolio. Find the correlation between the returns of Stock A and Stock B. Proportion of A Proportion of Volatility Portfolio 1 20% 80% 42.65% Portfolio 2 |40% 60% 36.89% Portfolio 3 70% 30% 30.10% 45.4% 55.0% 40.6% 50.2% 59.7%

Three portfolios are created using shares of Stock A and Stock B. The table below provides the proportional value of the two stocks in each portfolio, as well as the volatility of each portfolio. Find the correlation between the returns of Stock A and Stock B. Proportion of A Proportion of Volatility Portfolio 1 20% 80% 42.65% Portfolio 2 |40% 60% 36.89% Portfolio 3 70% 30% 30.10% 45.4% 55.0% 40.6% 50.2% 59.7%

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 6P

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