Question: Using the information, create a variance covariance matrox Then use the matrix you created to answer the following questions. Use the MMULT formula to solve
Using the information, create a variance covariance matrox Then use the matrix you created to answer the following questions. Use the MMULT formula to solve for variance/standard deviation Variance of the following stocks Stock A: 0.05 Stock B: 0.04 Stock C: 0.08 Expected Returns of following stocks, Stock At 10% Stock 8: 8% Stock Ct 15% Covariance (a,b): 0.0440 Covariance (a.c): 0.0325 Covariance (b.c): -0.0500 Q1. What is the standard deviation of a portfolio invested 30% in stock A, 25% in stock B, and 45% in stock C? Q2 - You plan to invest a portion of your money in the portfolio constructed in parta of this question and a portion in a risk-free asset. The risk-free interest rate is 2.5%. What is the expected return on this investment, assuming 25% invested in the risky asset and 75% in the risk-free asset? What is the standard deviation of the return on this investment
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