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Create a portfolio using the three stocks and information below: Expected Return Stock A 34.00% Stock B 5.00% Stock CD 17.00%

What is the variance of A?

What is the variance of B?

What is the variance of C?

What is the Correlation (A,A)?

What is the Correlation (B,B)?

What is the Correlation (C,C)?

What is the Covariance (A,A)?

What is the Covariance (A,B)?

What is the Covariance (A,C)?

What is the Covariance (B,A)?

What is the Covariance (B,B)?

What is the Covariance (B,C)?

What is the Covariance (C,A)?

What is the Covariance (C,B)?

What is the Covariance (C,C)?

What is the expected return on the portfolio above?

What is the variance on the portfolio above?

What is the standard deviation on the portfolio above?

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Answer #1

I'm allowed to answer only 4 subparts in one question. You can surely ask the other subparts in a different question

Var(A) = 0.212 = 4.41%

Var(B) = 0.252 = 6.25%

Var(C) = 0.122 = 1.44%

Corr(A,A) = Var(A)/Std. dev(A)2 = 1

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