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Delicious77 [7]
3 years ago
15

The standard deviation of a portfolio consisting of 30% of Stock X and 70% of Stock Y is:

Business
1 answer:
andrew-mc [135]3 years ago
5 0

Answer:

The portfolio SD is A. 20.65%

Explanation:

The standard deviation tells the total risk (both systematic and unsystematic) associated with a stock or a portfolio. The portfolio risk or the standard deviation of portfolio can be calculated using the following formula as attached in the picture below.

Using this formula, the standard deviation of the portfolio is:

SDp = √(0.3)² * (0.2)² + (0.7)² * (0.25)² + 2 * (0.3)*(0.7) * 0.4 * (0.2)*(0.25)

Portfolio SD = 0.20645 or 20.645% rounded off to 20.65%

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<u>Giving the following information:</u>

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3 years ago
Historically, 74% of credit card users carry a balance from month-to-month. A certain credit card company would like to study th
Hoochie [10]

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3 years ago
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3 0
3 years ago
Read 2 more answers
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