A College Student Owns Two Securities: Apple and Coca- Cola

question 58

Multiple Choice

A college student owns two securities: Apple and Coca- Cola. Apple has an expected return of 15%, with a standard deviation of those returns being 11%. Coca-Cola has an expected return of 12% and a standard deviation of 7%. The correlation of returns between Apple and Coca-Cola is 0.81. If the portfolio consist of $6,000 in Coca-Cola and $4,000 in Apple, what is the expected standard deviation of portfolio returns?

• A) 8.18%
• B) 13.20%
• C) 8.60%
• D) 9.71%