A portfolio consists of two stocks with Stock A having a weight of 64 percent.Stock A has a standard deviation of 21.22 percent.Stock B has a standard deviation of 16.44 percent.The stocks have a covariance of -.027.What is the portfolio variance?
A).0012
B).0095
C).0049
D).0190
E).0344

Question

Quizplus · Accepted Answer

Weight of Stock B = 1 - .64 = .36Var.= .64²(.2122)² + 2(.64)(.36)(-.027)+ .36²(.1644)² = .0095

A Portfolio Consists of Two Stocks with Stock a Having