The One-Year Standard Deviation of Your Portfolio Is 14

question 9

Multiple Choice

The one-year standard deviation of your portfolio is 14.8%. What is the 2-year standard deviation?

• A)16.47%
• B)18.23%
• C)20.93%
• D)25.41%
• E)27.20%

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Definitions:

Product-moment

Refers to a correlation coefficient developed by Karl Pearson that measures the strength and direction of a linear relationship between two variables.

Negative Correlation

A linkage between two variables that shows one increasing while the other decreases.

Coefficient of Alienation

A statistical measure that represents the amount of variation in one variable that is not accounted for by its relationship with another variable.

Positive Slope

An upward trend in a line graph indicating an increase in one variable as another variable increases.