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In: Finance

Suppose Wesley​ Publishing's stock has a volatility of 60 %​, while Addison​ Printing's stock has a...

Suppose Wesley​ Publishing's stock has a volatility of 60 %​, while Addison​ Printing's stock has a volatility of 25 %. If the correlation between these stocks is 20 %​, what is the volatility of the following portfolios of Addison and​ Wesley:

a. 100 % Addison

b. 75 % Addison and 25 % Wesley

c. 50 % Addison and 50 % Wesley

Solutions

Expert Solution

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

Cell reference -

jeff jeffy answered 2 years ago
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