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You Have Decided to Create a Portfolio with Two Assets

question 17

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You have decided to create a portfolio with two assets: stock X and stock Y.You invest 20% of your funds in X and 80% of your funds in stock Y.The standard deviation of X is 30% and the standard deviation of Y is 40%.The two stocks have a correlation coefficient of - 0.5.What is the portfolio's standard deviation?


Definitions:

Structural Capital

The knowledge, processes, databases, and intellectual property that an organization possesses, which together contribute to its value and productivity.

Employee Capital

The value that employees bring to an organization through their skills, knowledge, and abilities, contributing to its competitive advantage and success.

Intellectual Capital

The collective knowledge, skills, and abilities of an organization's workforce, including innovations, processes, and relationships, which can contribute to competitive advantage.

Structural Capital

The knowledge, processes, patents, or systems that an organization possesses, contributing to its competitive advantage.

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