You Currently Have a Portfolio Comprised of 70% Stocks and 30

question 50

Multiple Choice

You currently have a portfolio comprised of 70% stocks and 30% bonds. Which one of the following must be true if you change the asset allocation?

• A)The expected return will remain constant.
• B)The revised portfolio will be perfectly negatively correlated with the initial portfolio.
• C)The two portfolios could have significantly different standard deviations.
• D)The portfolio variance will be unaffected.
• E)The portfolio variance will most likely decrease in value.

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