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Memphic Memphic
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Posts: 728
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6 years ago
The variance on a portfolio that is made up of equal investments in Duke Energy and Microsoft stock is closest to:
A) .065
B) 0.090
C) .149
D) -0.020
Textbook 
Corporate Finance: The Core

Corporate Finance: The Core


Edition: 4th
Authors:
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wrote...
6 years ago
A
Explanation:  A) Var(Rp) = x12Var(R1) + x22Var(R2) + 2X1X2Cov(R1,R2)
= (.50)2(0.0568) + (.50)2(0.2420) + 2(.5)(.5)(-0.0193) = 0.0651
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