Purchase Solution

Calculate the standard deviation of two assets: Lind Distributing, Henry Manufacturing

Not what you're looking for?

Ask Custom Question

The standard deviation of the rate of return for Lind Distributing is 18% while that for Henry Manufacturing is 22%. If the correlation between their returns is -0.25, what is the standard deviation of a portfolio composed 70% of Lind and 30% of Henry common stock?

Purchase this Solution

Solution Summary

The solution carefully works through the calculations in both narrative and mathematical computations.

Solution Preview

To find the standard deviation of a portfolio composed of the two assets you need to first compute the variance of the portfolio and then you can find the standard deviation by taking the square root of the variance. To find the variance of the portfolio, call it Vp, you have to use the following equation:


Where 'w1' is the ...

Purchase this Solution

Free BrainMass Quizzes
Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.


This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

Introduction to Finance

This quiz test introductory finance topics.