Question: Using the data in the followingtable, and the fact that the correlation of A and B is 0.24, calculate the volatility(standard deviation) of a portfolio

Using the data in the followingtable, and the fact that the correlation of A and B is 0.24, calculate the volatility(standard deviation) of a portfolio that is 80% invested in stock A and 20% invested in stock B.

Realized Returns

Year

Stock A

Stock B

2008

13%

15%

2009

27%

2010

10%

15%

2011

2012

14%

2013

14%

16%

What is the standard deviation of the portfolio?

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