Question

In: Finance

Returns on stocks X and Y are listed below: Period 1 2 3 4 5 6...

Returns on stocks X and Y are listed below:

Period 1 2 3 4 5 6 7
Stock X 3% -2% 9% 6% -1% -4% 11%
Stock Y 1% -4% 7% 12% 3% -2% -1%

Consider a portfolio of 20% stock X and 80% stock Y.

What is the (population) variance of portfolio returns?

Please round your answer to six decimal places.

Note that the correct answer will be evaluated based on the full-precision result you would obtain using Excel.

Solutions

Expert Solution

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -


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