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Two securities, A and B, with standard deviation of 30% and 40%, respectively. Calculate the standard deviation of a portfolio weighted equally between two securitites if their correlation is:

1. 0.9
2. 0.0
3. -0.9

And Henry's portfolio is composed of three securities with the following characteristics:

Security A with Beta 1.20, Standard Deviation random error term of 5%, proportion .30

Security B with beta 1.05, Standard Deviation random error term of 8%, proportion .50

Security C with beta .90, Standard Deviation random error term of 2% , proportion .20

If standard deviation of the market index is 18%, what is the total risk of the portfolio?

How do you get the answers, what are the calculations?

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The expert calculates the standard deviation of a portfolio.

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