In this question, you will be asked to calculate the variance/risk of a portfolio consisting of two assets. Consider a portfolio that only consists of asset E and asset B. E has weight of 60%, and B has weight of 40%. The variance of E is about 13%, and the variance of B is about 4%. The covariance between E and B is about 0.2. What is the variance of this portfolio? O 0.1492 0.1012 0.19 O 0.094

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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In this question, you will be asked to calculate the variance/risk of a portfolio consisting of two
assets.
Consider a portfolio that only consists of asset E and asset B. E has weight of 60%, and B has weight
of 40%. The variance of E is about 13%, and the variance of B is about 4%. The covariance between
E and B is about 0.2.
What is the variance of this portfolio?
0.1492
O 0.1012
0.19
0.094
Transcribed Image Text:In this question, you will be asked to calculate the variance/risk of a portfolio consisting of two assets. Consider a portfolio that only consists of asset E and asset B. E has weight of 60%, and B has weight of 40%. The variance of E is about 13%, and the variance of B is about 4%. The covariance between E and B is about 0.2. What is the variance of this portfolio? 0.1492 O 0.1012 0.19 0.094
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