What is the volatility standard deviation of a portfolio


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 a 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 firms of (a) type S, and (b) type I?

Request for Solution File

Ask an Expert for Answer!!
Finance Basics: What is the volatility standard deviation of a portfolio
Reference No:- TGS0640145

Expected delivery within 24 Hours