Stock A has a standard deviation of 15 percent per year and stock B has a standard deviation of 8 percent per year. The correlation between stock A and stock B is .40. You have a portfolio of these two stocks wherein stock B has a portfolio weight of 40 percent. What is your portfolio variance?

Answer rating: 100% (QA)

The formula for portfolio variance is Varp w12 VarA w22 VarB 2w1w2CovAB where Varp i... View the full answer