The return on Samsung stock has a standard deviation of 39% and the return on Toyota...
The return on Samsung stock has a standard deviation of 39% and the return on Toyota stock has a standard deviation of 15%. Their covariance is 0.0234.
a) If you invest 50% in Samsung and 50% in Toyota, what is the variance of the portfolio?
b) What is the standard deviation of the portfolio?
Homework Answers
Answer a.
Variance of portfolio is 0.05535
Answer b.
Standard deviation of portfolio is 0.2353 or 23.53%
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