Homework Answers
| Variance | =( w2A*σ2(RA) + w2B*σ2(RB) + 2*(wA)*(wB)*Cor(RA, RB)*σ(RA)*σ(RB)) |
| Variance | =0.3^2*0.03^2+0.7^2*0.05^2+2*0.3*0.7*0.03*0.05*0.4 |
| Variance | 0.00156 |
| Standard deviation= | (variance)^0.5 |
| Standard deviation= | 3.95% = 0.0395 |
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