Use the table for the question(s)below.
Consider the following expected returns,volatilities,and correlations:

-The volatility of a portfolio that is equally invested in Wal-Mart and Duke Energy is closest to:

Question

Use the table for the question(s)below.
Consider the following expected returns,volatilities,and correlations:
 
-The volatility of a portfolio that is equally invested in Wal-Mart and Duke Energy is closest to:

Quizplus · Accepted Answer

The volatility of a portfolio that is equally invested in Wal-Mart and Duke Energy can be calculated as follows:

Portfolio volatility = sqrt((0.5^2)*(0.11^2)+(0.5^2)*(0.14^2)+2*(0.5)*(0.5)*(0.11)*(0.14)*(0.35))
                    = 0.076 or 7.6%

Therefore, the closest option is C) 7.6%.

Use the Table for the Question(s)below