Unit 5 Slide _16

Unit 5 Slide _16 - 12 29 = (0.5^2)(18.2^2) +...

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Slide #16 From PPT Assuming a correlation coefficient of 1. Suppose you invest 50% of funds in Coca-Cola and 50% in Exxon Mobil, then: Portfolio variance = σ p 2 = x 1 2 σ 1 2 + x 2 2 σ 2 2 + (229( x 1 29( x 2 29(σ 1 29(σ 2 29(ρ
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Unformatted text preview: 12 29 = (0.5^2)(18.2^2) + (0.5^2)(27.3^2) + 2(0.5)(0.5)(18.2)(27.3) (1) = 517.6 Portfolio Standard Deviation = 22.75% [Remember that Cov(R 1 , R 2 ) = Cov(R 2 , R 1 )]....
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This note was uploaded on 07/06/2011 for the course MM 305 taught by Professor Fulton during the Fall '09 term at Kaplan University.

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