Consider Two Perfectly Negatively Correlated Risky Securities a and B

question 56

Multiple Choice

Consider two perfectly negatively correlated risky securities A and B. A has an expected rate of return of 12% and a standard deviation of 17%. B has an expected rate of return of 9% and a standard deviation of 14%. The weights of A and B in the global minimum variance portfolio are _____ and _____, respectively.

• A) 0.24; 0.76
• B) 0.50; 0.50
• C) 0.57; 0.43
• D) 0.45; 0.55
• E) 0.76; 0.24

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Definitions:

Manipulating

Influencing or controlling someone or something to one's advantage, often in an unfair or dishonest way.

Motivating

The process of providing reasons, incentives, or encouragement to act or behave in a specific manner.

Indirect Strategy

Indirect strategy in communication involves presenting the supporting reasons before the main message or request, often used to prepare the recipient and reduce resistance.

Employer

An individual or organization that hires and pays workers for their services.