Use the table below to answer the following question(s).
Below is a spreadsheet for a situation in which a day trader wants to decide on investing $200 in one of the index funds. Answer the following questions using PHStat.
-For the given two-asset portfolio,what is the portfolio risk?
A)2.97
B)1.69
C)2.39
D)2.17

Question

Use the table below to answer the following question(s).
Below is a spreadsheet for a situation in which a day trader wants to decide on investing $200 in one of the index funds.  Answer the following questions using PHStat.
-For the given two-asset portfolio,what is the portfolio risk?
A)2.97 
B)1.69 
C)2.39 
D)2.17

Quizplus · Accepted Answer

The portfolio risk for a two-asset portfolio is calculated using the formula: $\sqrt{w_1^2\sigma_1^2 + w_2^2\sigma_2^2 + 2w_1w_2\sigma_1\sigma_2\rho}$, where $w_1$ and $w_2$ are the weights of the assets in the portfolio, $\sigma_1$ and $\sigma_2$ are the standard deviations (risks) of the assets, and $\rho$ is the correlation coefficient between the returns of the two assets. Without specific values for these variables, the correct answer cannot be determined directly from the question. However, given the options, the correct answer is chosen based on the assumption that the question implies a calculation has been made.

Use the Table Below to Answer the Following Question(s)