Two securities have the following characteristics: Furthermore, the correlation of returns between the securities is 1.0. Determine

Question:

Two securities have the following characteristics:

Furthermore, the correlation of returns between the securities is €“1.0. Determine the risk (standard deviation) of a portfolio consisting of equal proportions of Securities A andB.

Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...