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Using the data in the following table, and the fact that the correlation of A and B is 0.50, calculate the volatility (standard deviation) of a portfolio that is 50% invested in stock A and 50% invested in stock Realized Returns Year 2008 2009 2010 2011 2012 2013 Stock A - 6% 14% 9% - 9% 3% 12% Stock B 26% 33% 15% - 9% - 10% 18% The standard deviation of the portfolio is %. (Round to two decimal places.)

Using the data in the following table, and the fact that the correlation of A and B is 0.50, calculate the volatility (standard deviation) of a portfolio that is 50% invested in stock A and 50% invested in stock Realized Returns Year 2008 2009 2010 2011 2012 2013 Stock A - 6% 14% 9% - 9% 3% 12% Stock B 26% 33% 15% - 9% - 10% 18% The standard deviation of the portfolio is %. (Round to two decimal places.)

Intermediate Financial Management (MindTap Course List)
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter3: Risk And Return: Part Ii
Section: Chapter Questions
Problem 3P: Two-Asset Portfolio Stock A has an expected return of 12% and a standard deviation of 40%. Stock B...
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Using the data in the following table, and the fact that the correlation of A and B is 0.50, calculate the volatility (standard deviation) of a portfolio that is 50% invested in stock A and 50% invested in stock B. Year 2008 2009 2010 2011 2012 2013 Realized Returns Stock A - 6% 14% 9% - 9% 3% 12% Stock B 26% 33% 15% - 9% - 10% 18% The standard deviation of the portfolio is %. (Round to two decimal places.)
Transcribed Image Text:Using the data in the following table, and the fact that the correlation of A and B is 0.50, calculate the volatility (standard deviation) of a portfolio that is 50% invested in stock A and 50% invested in stock B. Year 2008 2009 2010 2011 2012 2013 Realized Returns Stock A - 6% 14% 9% - 9% 3% 12% Stock B 26% 33% 15% - 9% - 10% 18% The standard deviation of the portfolio is %. (Round to two decimal places.)
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