Question: Using the data from the accompanying table, what is the volatility of an equally weighted portfolio of Loblaw and OpenText stock? Estimated Annual Volatilities and
Using the data from the accompanying table, what is the volatility of an equally weighted portfolio of
Loblaw and OpenText stock?
| Estimated Annual Volatilities and Correlations for Selected Socks (Based on Monthly Returns, 2013-2017) | |||||||
| Stantec | Canadian Tire | Canadian Pacific | OpenText | Loblaw | Canadian Natural Resources | WestJet Airlines Ltd. | |
|---|---|---|---|---|---|---|---|
| Standard Deviation | 24% | 18% | 22% | 22% | 17% | 24% | 22% |
| Stantec | 1.00 | 0.18 | 0.41 | 0.12 | 0.12 | 0.44 | 0.24 |
| Canadian Tire | 0.18 | 1.00 | 0.25 | 0.02 | 0.35 | 0.12 | 0.00 |
| Canadian Pacific | 0.41 | 0.25 | 1.00 | 0.29 | 0.28 | 0.27 | 0.19 |
| OpenText Corporation | 0.12 | 0.02 | 0.29 | 1.00 | 0.21 | 0.09 | 0.00 |
| Loblaw | 0.12 | 0.35 | 0.28 | 0.21 | 1.00 | 0.07 | 0.05 |
| Canadian Natural Resources | 0.44 | 0.12 | 0.27 | 0.09 | 0.07 | 1.00 | 0.18 |
| WestJet Airlines Ltd. | 0.24 | 0.00 | 0.19 | 0.00 | 0.05 | 0.18 | 1.00 |
| Source: Data from Yahoo!Finance Canada. | |||||||
The volatility of the portfolio is
SD(Rp) = %.
(Round to one decimal place.
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