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 E 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 E 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.)
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
Section: Chapter Questions
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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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