Answer:
30.51%
Explanation:
The computation of the standard deviation is shown below:
Data provided in the question
Weightage in IBM = 30% = WI
Weightage in MFST = 100 - 30% = 70% = WM
The Volatility in IBM = 35% = VI
The Volatility in MFST = 30% = VM
Correlation = 0.5 = C
Based on the above information
The standard deviation is
[tex]= \sqrt{(VI^2\times WI^2) + (VM^2 \times WM^2) + (2 \times VI \times WI \times VM \times WM \times C)}[/tex]
[tex]= \sqrt{(0.35^2\times 0.30^2) + (0.35^2 \times 0.70^2) + (2 \times 0.35 \times 0.30\times 0.30 \times 0.70 \times 0.5)}[/tex]
= 30.51%
