# Question: Suppose Wesley Publishing s stock has a volatility of 60 while

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.

**View Solution:**## Answer to relevant Questions

Using the data in Table 11.1,a. Compute the annual returns for a portfolio with 25% invested in North Air, 25% invested in West Air, and 50% invested in Tex Oil.b. What is the lowest annual return for your portfolio in part ...Suppose Ford Motor stock has an expected return of 20% and a volatility of 40%, and Molson Coors Brewing has an expected return of 10% and a volatility of 30%. If the two stocks are uncorrelated,a. What is the expected ...You expect HGH stock to have a 20% return next year and a 30% volatility. You have $25,000 to invest, but plan to invest a total of $50,000 in HGH, raising the additional $25,000 by shorting either KBH or LWI stock. Both KBH ...Using the data in Problem 4, suppose you are holding a market portfolio, and have invested $12,000 in Stock C.a. How much have you invested in Stock A?b. How many shares of Stock B do you hold?c. If the price of Stock C ...Consider the following airline industry data from mid-2009:a. Use the estimates in Table 12.3 to estimate the debt beta for each firm (use an average if multiple ratings are listed).b. Estimate the asset beta for each ...Post your question