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johnpaech johnpaech
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5 years ago
The volatility of a portfolio that consists of a long position of $10,000 in Wal-Mart and a short position of $2000 in Microsoft is closest to:
A) 9%
B) 14%
C) 11%
D) 12%
Textbook 
Corporate Finance: The Core

Corporate Finance: The Core


Edition: 4th
Authors:
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pbrown223pbrown223
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5 years ago
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More solutions for this book are available here
B
Explanation:  B) Var(Rp) = x12Var(R1) + x22Var(R2) + 2X1X2Corr(R1,R2)SD1SD2
= 1.252(.14)2 + (- 25)2(.24)2 + 2(1.25)(-.25)(0.7)(.14)(.24)
= .019525

stdev =   = .139732

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johnpaech Author
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#2
4 years ago
This course drove me insane!
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#3
3 years ago
this course!
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