Your Portfolio Has a Standard Deviation of 16

question 81

Multiple Choice

Your portfolio has a standard deviation of 16.6%. What is the 2-year standard deviation?

• A)14.87%
• B)15.83%
• C)16.55%
• D)23.48%
• E)24.15%

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Definitions:

Forecast Horizon

The maximum period for which a prediction or forecast is considered valid or reliable, beyond which the uncertainty becomes too large.

Depreciation Expense

The portion of the total cost of a tangible asset that is charged as an expense in a particular accounting period due to its usage and wear and tear.

Financial Structure

The mix of a company's liabilities and shareholders' equity used to finance its assets, including short-term and long-term debt, as well as equity capital.

Operating Cash Flows

Cash generated from a company's normal business operations, reflecting how well it can generate cash to pay debts and fund its operating expenses.