Use the table for the question(s)below.
Consider the following returns:
-The variance on a portfolio that is made up of equal investments in Stock X and Stock Y is closest to:
A)0.12
B)0.10
C)0.69
D)0.29

Question

Use the table for the question(s)below.
Consider the following returns: 
-The variance on a portfolio that is made up of equal investments in Stock X and Stock Y is closest to:
A)0.12 
B)0.10 
C)0.69 
D)0.29

Quizplus · Accepted Answer

A) 11ea7cce_3d1e_b0ed_928c_0f5bff6d3078_TB1626_00 Var(R_p)= x₁^2Var(R₁)+ x₂^2Var(R₂)+ 2X₁X₂Cov(R₁,R₂) = (.50)2(0.125447467)+ (.50)2(0.177795367)+ 2(.5)(.5)(0.103446133)= 0.118913264

Use the Table for the Question(s)below