Stock A has an expected return of 0.117 and volatility of 0.4. Stock B has expected return of 0.115 and volatility of 0.8. The correlation between Stocks A and B is 0.1. You form a portfolio consisting of $4,000 in Stock A and $2,000 in Stock B. What is your portfolio's volatility? Enter your answer as a decimal and show 4 decimal places.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Stock A has an expected return of 0.117 and volatility of 0.4. Stock B has expected return of 0.115 and volatility of 0.8. The correlation
between Stocks A and B is 0.1. You form a portfolio consisting of $4,000 in Stock A and $2,000 in Stock B. What is your portfolio's volatility?
Enter your answer as a decimal and show 4 decimal places.
Transcribed Image Text:12 -01 Stock A has an expected return of 0.117 and volatility of 0.4. Stock B has expected return of 0.115 and volatility of 0.8. The correlation between Stocks A and B is 0.1. You form a portfolio consisting of $4,000 in Stock A and $2,000 in Stock B. What is your portfolio's volatility? Enter your answer as a decimal and show 4 decimal places.
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