Annual returns of three stocks are given below. Two of them (Air America and Air Brazil)...

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Annual returns of three stocks are given below. Two of them (Air America and Air Brazil) are airline stocks and one (Star Oil) is an oil stock. In general, when oil prices go up, airline company stocks go down and oil company stocks go up. YEAR 2016 2017 2018 2019 2020 2021 Air America -28% 30% 7% -5% -2% 9% Air Brazil 9% -28% 7% -2% -5% 30% Star Oil -2% -5% 9% -28% 30% 7% Create a porfolio (to diversify risk) by mixing 50% of Air America and 50% of Star Oil stocks. How much is the portfolio's risk (i.e., annual standard deviation)? Notice that risk goes down in a portfolio. Enter your answer in the following format: 0.1234 Hint: Answer is between 0.1232 and 0.1550 Annual returns of three stocks are given below. Two of them (Air America and Air Brazil) are airline stocks and one (Star Oil) is an oil stock. In general, when oil prices go up, airline company stocks go down and oil company stocks go up. YEAR 2016 2017 2018 2019 2020 2021 Air America -28% 30% 7% -5% -2% 9% Air Brazil 9% -28% 7% -2% -5% 30% Star Oil -2% -5% 9% -28% 30% 7% Create a porfolio (to diversify risk) by mixing 50% of Air America and 50% of Star Oil stocks. How much is the portfolio's risk (i.e., annual standard deviation)? Notice that risk goes down in a portfolio. Enter your answer in the following format: 0.1234 Hint: Answer is between 0.1232 and 0.1550

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To calculate the portfolios risk annual standard deviation we need to consider the individual stocks ... View the full answer