Stock X has a standard deviation of 22 percent per year and stock Y has a standard deviation of 8 percent per year.The correlation between stock A and stock B is .21.You have a portfolio of these two stocks wherein stock Y has a portfolio weight of 40 percent.What is your portfolio variance?
A).02022
B).02156
C).02239
D).02247
E).02350

Question

Quizplus · Accepted Answer

Var_Port = [(1 - .40)² × .22²] + [.40² × .08²] + [2 × (1 - .40) × .40 × .22 × .08 × .21] = .02022

Stock X Has a Standard Deviation of 22 Percent Per