The Standard Deviation of a Two Asset Portfolio with a Correlation

question 2

Multiple Choice

The standard deviation of a two asset portfolio with a correlation coefficient of .35 will be _______________ the weighted average standard deviation of the portfolio.

• A) below
• B) above
• C) equal to
• D) None of the options are correct

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Definitions:

Empirical Evidence

Information acquired by observation or experimentation that serves as a basis for knowledge in a field or for making decisions.

Complex Combination

Refers to a mixture or blend of multiple components that together create a system or scenario that is difficult to understand or analyze due to its intricacies.

Cross-modal Transference

The ability to transfer information gained through one sensory modality to another, enhancing cognitive processing and perception.

Unimodal Identification

The process of recognizing objects, concepts, or sensations based on a single sensory input or modality.