How to calculate the expected standard deviation of a weighted composite portfolio?
So my questions asks me to determine the expected standard deviation for a weighted composite portfolio, but I have no idea what equation to begin with. I have answered A, but B I am lost.
Here is the information:
Portfolio Weight: Bonds 30%, Equity 60%, Real Estate 10%.
Expected Return: Bonds 5%, Equity 14%, Real Estate 8%.
Expected Standard Deviation Bonds 10, Equity 26, Real Estate 16.
The Expected Covariance section is a little strange and i do not know how to use it properly. It is presented in a 3x3 box with the column headers bonds, equity, and real estate, but it would show this information:
Bonds with Bonds 100
Equity with Bonds 84.2, and with equity 676
Real Estate with 45.4 Bonds, with Equity 174, and with Real Estate 256
If anyone has any insight I would be very appreciative
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