You invest 50% of your money in IBM stock and 50% of your money in Microsoft stock. The volatilities of returns on IBM and Microsoft stocks are 8% and 12%, respectively. If the correlation between IBM and Microsoft's stock returns is 0.7, what is the volatility of return on your investment? 9.25% 7.21% 6.98% 8.99%

You invest 50% of your money in IBM stock and 50% of your money in Microsoft stock. The volatilities of returns on IBM and Microsoft stocks are 8% and 12%, respectively. If the correlation between IBM and Microsoft's stock returns is 0.7, what is the volatility of return on your investment? 9.25% 7.21% 6.98% 8.99%

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 11P

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