Hello, I cannot figure out what i am missing here. Here is a practice ? I have. Posted answer is below. Given the following information, compute the variance of a three-asset portfolio: Correlation coefficients,b = 0.22 Correlation coefficients,c = -0.06 Correlation coefficientb,c = 0.16 E(Ri) SD Wi Stocks(S) 0.13 0.17 0.65 Bonds(B) 0.10 0.12 0.20 Cash© 0.08 0.03 0.15 Solution The variance = [(0.652 × 0.172) + (0.202 × 0.122) + (0.152 × 0.032)] + (2 × 0.65 × 0.20 × 0.17 × 0.12 × 0.22) + (2 × 0.65 × 0.15 × 0.17 × 0.03 × -0.06) + (2 × 0.20 × 0.15 × 0.12 × 0.03 × 0.16) = 0.013948 My issue is that i come up with 0.01595, [in brackets below] for this calculation, as follows. Any ideas? The variance = [(0.652 × 0.172) [.01221] + (0.202 × 0.122) [.000576] + (0.152 × 0.032)] [.002025] + (2 × 0.65 × 0.20 × 0.17 × 0.12 × 0.22) [.001166] + (2 × 0.65 × 0.15 × 0.17 × 0.03 × -0.06) [-.0000596] + (2 × 0.20 × 0.15 × 0.12 × 0.03 × 0.16) [.0000345] = 0.013948. [.01595]

What I find most interesting is that

[(0.652 × 0.172) + (0.202 × 0.122) + (0.152 × 0.032)] + (2 × 0.65 × 0.20 × 0.17 × 0.12 × 0.22) + (2 × 0.65 × 0.15 × 0.17 × 0.03 × -0.06) + (2 × 0.20 × 0.15 × 0.12 × 0.03 × 0.16)

is equal to 0.1428, so I have no idea what you’re talking about.

As a side note, I doubt anyone will want to deal with this problem unless you format it better. It’s just a mess of numbers.