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Calculate the Standard Deviation of a portfolio consisting of 25% stock A and 75% stock B....

Calculate the Standard Deviation of a portfolio consisting of 25% stock A and 75% stock B.

Stock SD Corr A,B = 0.24
A 30%
B 50%

NOTE: the correct answer is 39.97%, but I am more interested in the correct formula and process of solving the question. Please show all work and calculations, Thank you!

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Answer #1

Standard deviation of portfolio is mathematically represented as:

Applying the values in above formula.

Standard deviation = 39.97%

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