Stocks a and B Each Have an Expected Return of 15%,a

question 95

Multiple Choice

Stocks A and B each have an expected return of 15%,a standard deviation of 20%,and a beta of 1.2.The returns on the two stocks have a correlation coefficient of +0.6.You have a portfolio that consists of 50% A and 50% B.Which of the following statements is CORRECT?

• A) The portfolio's beta is less than 1.2.
• B) The portfolio's expected return is 15%.
• C) The portfolio's standard deviation is greater than 20%.
• D) The portfolio's beta is greater than 1.2.
• E) The portfolio's standard deviation is 20%.

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Definitions:

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The fluid surrounding a fetus within the amniotic sac, providing protection and facilitating the exchange of nutrients, water, and biochemical products between mother and fetus.

Lab Testing

The analysis of bodily fluids, tissues, or other substances in a controlled environment to diagnose disease, measure progress, or guide treatment.

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Tiny, finger-like projections found in the placenta, involved in nutrient exchange between mother and fetus.

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The structure through which the fetus obtains nourishment during pregnancy; the afterbirth.