Question

Suppose Wesley? Publishing's stock has a volatility of 45%?, while Addison? Printing's stock has a volatility of 25%. If the correlation between these stocks is 30%?, 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.

Answer #1

what is the volatility of the following portfolios of Addison and Wesley:

a. 100% Addison

Volatility = 25%

b. 75% Addison and 25% Wesley

Volatility = Sqrt(weight of wesley^2*Volatility of wesley^2 + weight of Addison^2*Volatility of Addison^2 + 2 * weight of Addison * weight of Wesley * Correlation * volatility of wesley * volatility of Addison)

Volatility = Sqrt(0.25^2*0.45^2 + 0.75^2*0.25^2 + 2 * 0.75 * 0.25 * 0.45 * 0.25 * 0.30)

Volatility = Sqrt(6.05%)

**Volatility = 24.59%**

c. 50% Addison and 50% Wesley.

Volatility = Sqrt(weight of wesley^2*Volatility of wesley^2 + weight of Addison^2*Volatility of Addison^2 + 2 * weight of Addison * weight of Wesley * Correlation * volatility of wesley * volatility of Addison)

Volatility = Sqrt(0.50^2*0.45^2 + 0.50^2*0.25^2 + 2 * 0.50 * 0.50 * 0.45 * 0.25 * 0.30)

Volatility = Sqrt(8.31%)

**Volatility = 28.83%**

Suppose Wesley Publishing's stock has a volatility of
65%,
while Addison Printing's stock has a volatility of
20%.
If the correlation between these stocks is
45%,
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

Suppose Wesley Publishing's stock has a volatility of
60%,while Addison Printing's stock has a volatility of 30%.If the
correlation between these stocks is 25%, what is the volatility of
the following portfolios of Addison and Wesley:
Make sure to round answer 2 decimal place
a. 100% Addison
b. 75% Addison and 25% Wesley
c.50% Addison and 50% Wesley

Suppose Wesley Publishing's stock has a volatility of
70 %, while Addison Printing's stock has a volatility of
25 %. If the correlation between these stocks is
10 %, 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
Round answers to two decimal places

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while Addison Printing's stock has a volatility of 30 %. If the
correlation between these stocks is 15 %, 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
a. The volatility of a portfolio of 100 % Addison stock is
nothing%. (Round to two decimal places.)...

Suppose Wesley Publishing's stock has a volatility of 50 %,
while Addison Printing's stock has a volatility of 20 %. If the
correlation between these stocks is 65 %, 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
a. The volatility of a portfolio of 100 % Addison stock is
nothing _______ %. (Round to two...

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(a )+1.00 ,
(b )0.50
(c )0.00
(d ) ?0.50 ,
and
(e )?1.00.
In which of the cases is the volatility lower than that of the
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