Question: Following are estimates of the standard deviations and correlation coefficients for three stocks. a. If a portfolio is composed of 20% of stock A and

Following are estimates of the standard deviations and correlation coefficients for three stocks.

a. If a portfolio is composed of 20% of stock A and 80% of stock C, what is the portfolio's standard deviation?
b. If a portfolio is composed of 40% of stock A, 20% of stock B, and 40% of stock C, what is the portfolio's standard deviation?

Correlation with Stock Standard Deviation Stock 0.20 -0.20 1.00 12% 1.00 1.00 -0.20 15 10 0.20

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A portfolios standard deviation is given by a s p X 1 X 1 s 11 X 1 X 2 s 12 X 2 X 1 s 21 X 2 X 2 s ... View full answer

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