Question: Q1 : Using the data in the following? table, and the fact that the correlation of A and B is 0.64?, calculate the volatility?(standard deviation)
Q1: Using the data in the following? table, and the fact that the correlation of A and B is 0.64?, calculate the volatility?(standard deviation) of a portfolio that is 50% invested in stock A and 50% invested in stock B.
| Realized Returns | |||||
| Year | Stock A | Stock B | |||
| 2008 | ?1?% | 23?% | |||
| 2009 | 17?% | 39?% | |||
| 2010 | 22?% | 14?% | |||
| 2011 | ?1?% | ?2?% | |||
| 2012 | 33?% | ?12?% | |||
| 2013 | 55?% | 19?% > The standard deviation of the portfolio is? | |||
Q2: Using the data in the following? table, and the fact that the correlation of A and B is 0.48?, calculate the volatility? (standard deviation) of a portfolio that is 70% invested in stock A and 30% invested in stock B.
| Realized Returns | |||||
| Year | Stock A | Stock B | |||
| 2008 | ?10?% | 21?% | |||
| 2009 | 20?% | 30?% | |||
| 2010 | 55?% | 77?% | |||
| 2011 | ?5?% | ?3?% | |||
| 2012 | 22?% | ?8?% | |||
| 2013 | 99?% | 25?% | |||
The standard deviation of the portfolio is?
Q3: You have ?$56,000. You put 19?% of your money in a stock with an expected return of 12?%, ?$40,000 in a stock with an expected return of 16?%, and the rest in a stock with an expected return of 18?%. What is the expected return of your? portfolio?
The expected return of your portfolio is____%
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