Answer: volatility Portfolio = 32.86%
Explanation:
The question is incomplete we need the value of correlation is missing. we will assume a correlation of 0.35.
W1 = 50% weight of investment in garbor stock
W2 = 50% weight of investment in Glencore stock
Standard deviation garbor = 40%
Standard deviation Glencore stock = 40%
Volatility ^2= (W1)^2(Sd2)^2 + (W2)^2(Sd2)^2 - 2W1W2 x Sd1Sd2 x p
Volatility^2 = (0.5)^2(0.40)^2 + (0.5)(0.40)^2 - 2(0.5)(0.5) x(0.4)(0.4)(0.35)
Volatility^2 = 0.04 + 0.04 + 0.028 = 0.108
volatility =[tex]\sqrt{0.108}[/tex] = 0.3286335345
volatility = 32.86%
