Mr. Jones has a 2-stock portfolio with a total value of $530,000. $205,000 is invested in Stock A and the remainder is invested in Stock B. If standard deviation of Stock A is 15.65%, Stock B is 7.75%, and correlation between Stock A and Stock B is –0.40, what would be the expected risk on Mr. Jones’ portfolio (standard deviation of the portfolio return)?

Calcualte with at least 4 decimal places and round your answer to two decimal places. For example, if your answer is $345.6671 round as 345.67 and if your answer is .05718 or 5.7182% round as 5.72.

 

Answer rating: 100% (QA)

To calculate the expected risk or standard deviation of Mr Jones portfolio we can use the formula fo... View the full answer