Create a portfolio using the four stocks and information below:
Expected Return 
Standard Deviation 
Weight in Portfolio 

Stock A 
21.00% 
16.00% 
17.00% 
Stock B 
34.00% 
33.00% 
22.00% 
Stock C 
33.00% 
21.00% 
16.00% 
Stock D 
27.00% 
27.00% 
45.00% 
 
 
 
 
Correlation (A,B) 
0.4400 
 
 
Correlation (A,C) 
0.3300 
 
 
Correlation (A,D) 
0.9400 
 
 
Correlation (B,C) 
0.7000 
 
 
Correlation (B,D) 
0.0200 
 
 
Correlation (C,D) 
0.6400 
 
 
all answered right exept the last two
(Do not round intermediate calculations. Record your answers in decimal form and round your answers to 4 decimal places. Ex. x.xxxx)
What is the variance of A? 0.0256
What is the variance of B? 0.1089
What is the variance of C? 0.0441
What is the variance of D? 0.0729
What is the Correlation (A,A)? 1
What is the Correlation (B,B)? 1
What is the Correlation (C,C)? 1
What is the Correlation (D,D)? 1
What is the Covariance (A,A)? 0.0256
What is the Covariance (A,B)? 0.02323
What is the Covariance (A,C)?0.0110
What is the Covariance (A,D)? 0.0406
What is the Covariance (B,A)?0.02323
What is the Covariance (B,B)? 0.1089
What is the Covariance (B,C)? 0.04851
What is the Covariance (B,D)? 0.0018
What is the Covariance (C,A)?0.0110
What is the Covariance (C,B)? 0.04851
What is the Covariance (C,C)?0.0441
What is the Covariance (C,D)?0.03629
What is the Covariance (D,A)?0.0406
What is the Covariance (D,B)?0.0018
What is the Covariance (D,C)?0.03629
What is the Covariance (D,D)?0.0729
What is the expected return on the portfolio above?0.2848
What is the variance on the portfolio above?
What is the standard deviation on the portfolio above?
Standard Deviation of portflio= Square Root of Variance of Portfolio (refer below for Variance)
=0.198612
Variance of portfolio= Sum of (Wt^{2} * S.D.) (for all 4 stocks A, B, C, D) + Sum of (2 * Wt_{A} * Wt_{B} * Cov_{A,B} )(for all 6 pair of stocks i.e. A and B, A and C, A and D, B and C, B and D, C and D)
= 0.0394468
(0.17*0.17*0.0256)+(0.22*0.22*0.1089)+(0.16*0.16*0.0441)+(0.45*0.45*0.0729)+ 2*(0.17*0.22*0.02323)+ 2*(0.17*0.16*0.0110)+ 2*(0.17*0.45*0.0406)+ 2*(0.22*0.16*0.04851)+ 2*(0.22*0.45*0.0018)+ 2*(0.16*0.45*0.03629) 
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