What Is the Variance of the Returns on a Portfolio

question 62

Multiple Choice

What is the variance of the returns on a portfolio comprised of $4,200 of Stock G and $5,300 of Stock H? $$\begin{array} { l c c } { \text { State of } } & \text { Probability of } & \text { Rate of Return } \\\text { Econony } & \text { State of Economy } & \text { if State Occurs } \\ & &\begin{array}{ll}\text { Stock G } & \text { Stock H }\end{array}\\\text { Boom } & .18& \begin{array}{ll}.18& \quad \quad .08\end{array} \\\text { Normal } & .82 & \begin{array}{ll}.14 & \quad \quad.11\end{array} \\\end{array}$$

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Definitions:

Industrialized Societies

Societies characterized by a high level of industrial development, with significant reliance on manufacturing and technology for economic and social organization.

Unmarried Couple Households

Living arrangements where two partners live together without being legally married.

Perspectives

Different ways of viewing or approaching an issue or concept, influenced by individual experiences, knowledge, and backgrounds.

Deteriorating

The process of becoming progressively worse, often used to describe declines in physical objects, health conditions, or environmental quality.