A portfolio has 20% investment weight in X and the rest 80% investment weight in Y. X has the standard deviation of 15%; Y has the standard deviation of 25%. V and W have the correlation coefficient of -0.4. What is this portfolio’s standard deviation? Group of answer choices 19.00% 21.46% 17.55% 23.36%
Added by Kyle T.
Step 1
The weighted average standard deviation of the portfolio can be calculated using the formula: Portfolio Standard Deviation = sqrt((Weight of X)^2 * (Standard Deviation of X)^2 + (Weight of Y)^2 * (Standard Deviation of Y)^2 + 2 * Weight of X * Weight of Y * Show more…
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