Calculate the Risk (Standard Deviation)of a $100,000 Portfolio Consisting of $50,000

question 25

Essay

Calculate the risk (standard deviation)of a $100,000 portfolio consisting of $50,000 of Sunspray Products Ltd (SPL)and $50,000 of Raincoats Galore Ltd (RGL)shares.The standard deviation of returns for SPL and RGL respectively are 6.68% and 10.60%,and the covariances of returns on the shares is - 0.0031.
What does your answer tell you about this portfolio?

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Definitions:

Unethical Sales Behaviour

Practices in sales that are deceptive, dishonest, or otherwise violate moral principles.

Ethical Misconduct

Behaviors or actions by individuals or organizations that violate moral or professional ethics standards.

Abusive Behaviour

Actions that intentionally cause harm or distress to another person, often used in the context of relationships or workplaces.

Bounded Ethicality

The concept that cognitive biases and organizational pressures lead individuals to engage in actions that are unethical without fully realizing their wrongdoing.