 After learning the computation of two asset portfolio, the computation dynamics of three asset portfolio model is much more important because in such model we should learn the computation process as and when we are adding new assets to the model. So how model works that is important for the purpose of a three asset portfolio. We have three assets in our three asset portfolio, we have stock, we have bonds and we have cash equivalent each for each of the individual asset we have corresponding expected rate of return, expected standard deviation and the corresponding weight using these values we determine the correlation between SB between SC between BC. So we have three assets, we have three combinations, we have three correlation coefficients, then using these values we can determine our portfolio, portfolio's expected return using these data. So this portfolio has an expected return of 10%. Now we have another data, so using this data we can apply the generalized formula which we have earlier used to determine standard deviation of two asset's portfolio and the expanded form of formula we can see it works in now four different steps. When we put the corresponding values into this three asset portfolio formula of portfolio standard deviation the resulting standard deviation is 13.06%. So if we see this formula there is nothing special in the formula, the only thing that we can see is basically the extension of the terms in each of the bracket as we can see in the earlier case.