# Question

Suppose Wesley Publishing’s stock has a volatility of 60%, while Addison Printing’s stock has a volatility of 30%. If the correlation between these stocks is 25%, what is the volatility of the following portfolios of Addison and Wesley:

(a) 100% Addison,

(b) 75% Addison and 25% Wesley, and

(c) 50% Addison and 50% Wesley.

(a) 100% Addison,

(b) 75% Addison and 25% Wesley, and

(c) 50% Addison and 50% Wesley.

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