Chapter 11, Problem 11P

a)

Summary Introduction

To determine: The volatility of portfolio when the portfolio of AP Company’s stock is 100% and WP Company’ stock is 0%.

Introduction:

The portfolio refers to a set of financial investments owned by the investor. The portfolio of investments includes the debentures, stocks, bonds, and mutual funds.

b)

Summary Introduction

To determine: The volatility of portfolio when the portfolio of AP Company’s stock is 75% and WP Company’s stock is 25%.

c)

Summary Introduction

To determine: The volatility of portfolio when the portfolio of AP Company’s stock is 50% and WP Company’s stock is 50%.