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You are shown the following data. If the correlationcoefficient between the combined portfolio of A+B and C is 0.2,what would happen to the overall volatility of the new portfolio ifwe invested 50% in A+B and the remaining 50% in C? You couldpotentially avoid computations.StocksVolatility%Portfolio investedAverage ReturnA and B275015C325018Volatility will lie somewhere between 32% and 40%.Volatility will lie somewhere between 27% and 32%.Volatility will be below 27%.Volatility will be above 40%.Volatility will become zero.
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