# Suppose Wesley Publishings stock has a volatility of 55%, while Addison Printings stock has a volatility of

## Question:

Suppose Wesley Publishing’s stock has a volatility of 55%, while Addison Printing’s stock has a volatility of 20%. If the correlation between these stocks is 30%, 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.

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