What is the volatility of a portfolio


Question:Consider an economy with two types of firms, S and I. S firms all move together. I firms move independently. For both types of firms, there is a 60% probability that the firms will have 15% return and a 40% probability that the firms will have a -10% return. What is the volatility (standard deviation) of a portfolio that consists of an equal investment in 20

a. Type S firms?

b. Type I firms?

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Accounting Basics: What is the volatility of a portfolio
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