Your portfolio has two investments with a correlation of 0.4. Investment #1 is 35% of your portfolio and has an expected value = 30% and a standard deviation = 12%. Investment #2 has an expected value = 17% and a standard deviation = 27%. What is the standard deviation of your portfolio? [Note: your answer should be to 4 decimal places] 0.7989
Your portfolio has two investments with a correlation of 0.4. Investment #1 is 35% of your portfolio and has an expected value = 30% and a standard deviation = 12%. Investment #2 has an expected value = 17% and a standard deviation = 27%. What is the standard deviation of your portfolio? [Note: your answer should be to 4 decimal places] 0.7989
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
Problem 1PS
Related questions
Question
![Your portfolio has two investments with a correlation of 0.4.
Investment #1 is 35% of your portfolio and has an expected value = 30% and
a standard deviation 12%.
=
Investment #2 has an expected value = 17% and a standard deviation = 27%.
What is the standard deviation of your portfolio? [Note: your answer should
be to 4 decimal places]
You Answered
0.7989
Correct Answer
19.6115 margin of error +/- 0.01](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F08d7a228-1139-4e6d-ae2a-a710856880a9%2F3e664e41-051e-4759-944b-06561babeb29%2Fzifjcfk_processed.png&w=3840&q=75)
Transcribed Image Text:Your portfolio has two investments with a correlation of 0.4.
Investment #1 is 35% of your portfolio and has an expected value = 30% and
a standard deviation 12%.
=
Investment #2 has an expected value = 17% and a standard deviation = 27%.
What is the standard deviation of your portfolio? [Note: your answer should
be to 4 decimal places]
You Answered
0.7989
Correct Answer
19.6115 margin of error +/- 0.01
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps with 4 images

Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you

Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,



Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,



Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,

Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education