Question: ** please answer with detailed workings and provide formulas. thank you Stock 1 has expected volatility of 15% Stock 2 has expected volatility of 20%

** please answer with detailed workings and provide formulas. thank you

Stock 1 has expected volatility of 15%

Stock 2 has expected volatility of 20%

Suppose stock 1 and 2 have correlation of 0.2

What is the closest to the expected volatility of a portfolio that is 60% stock 1 and 40% stock 2?

a. 11%

b. 12%

c. 13%

d. 14%

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