The correlation between the returns of three stocks A, B, C are given in the following tables:
The expected rates of returns on A, B, and C are 16%, 12%, and 15% respectively. The corresponding standard deviations of the returns are 25%, 22%, and 25%.
a. What is the standard deviation of a portfolio invested 25% in stock A, 25% in stock B, and 50% in Stock C?
b. You plan to invest 50% of your money in the portfolio constructed the part a and 50% in the risk-free assets. The risk-free interest rate is 5%. What is the expected return on this investment? What is the standard deviation of the returns on this investment?
Please show me how to find the answer in Microsoft Excel. I need to know the formula/inputs used in the solution.