Question: Using the data from Table 12.3, what is the volatility (standard deviation) of an equally weighted portfolio of Netflix and Boeing stock? TABLE 12.3 Estimated

Using the data from Table 12.3, what is the volatility (standard deviation) of an equally weighted portfolio of Netflix and Boeing stock? TABLE 12.3 Estimated Annual Volatilities and Correlations for Selected Stocks (Based on Monthly Returns, January 2006 December 2015) Standard Microsoft Starbucks Netflix Coca-Cola McDonald's Deviation 25% 29% 61% 16% 14% Microsoft 1 0.35 0.18 0.40 0.43 Starbucks 0.35 1 0.19 0.23 0.17 Netflix 0.18 0.19 1 0.00 Coca-Cola 0.40 0.23 1 McDonald's 0.43 0.17 0.13 0.59 1 Cisco 0.52 0.52 0.10 0.27 0.28 Boeing 0.28 0.48 0.10 0.34 0.37 Source: Authors' calculations based on data from The Center for Research in Security Prices. Boeing 26% 0.28 0.48 0.10 Cisco 28% 0.52 0.52 0.10 0.27 0.28 1 0.46 0.13 0.59 0.00 0.34 0.37 0.46 1 O A 14.3% OB.34.3% OC. 24 30%
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