Stock X Has a Standard Deviation of 21% Per Year

question 28

Multiple Choice

Stock X has a standard deviation of 21% per year and Stock Y has a standard deviation of 6% per year. The correlation between Stock A and Stock B is .38. You have a portfolio of these two stocks wherein Stock X has a portfolio weight of 42%. What is your portfolio standard deviation?

• A)8.89%
• B)9.85%
• C)10.64%
• D)11.84%
• E)12.92%

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Definitions:

Effective Flow

The efficient and smooth process of operations and tasks in an organizational or project setting.

Continuous Flow

A production process where items move from one step to the next with minimal waiting, aiming to maximize efficiency and reduce waste.

Productivity Obstacle

Any factor that impedes the efficiency and effectiveness with which work can be performed and output can be generated.

Poor Communication

Inadequate exchange of information that leads to misunderstandings, errors, and inefficiencies in an organizational setting.