What do you see happening to the portfolio volatility and


Using the following information to calculate the expected return and the standard deviation of a portfolio that is 50% in vested in 3 door inc. and in down co.

3 doors inc. down co. 

expected return 14% 10%

standard deviation 42 31

correlation 0.1

What is the standard devciation if the correlation is +1, 0, and -1 here. What do you see happening to the portfolio volatility and why? What are the expected return and standard deviation on the minimal variance portfolio?

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Finance Basics: What do you see happening to the portfolio volatility and
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