You Have a Portfolio Which Is Comprised of 40% of Stock

question 52

Multiple Choice

You have a portfolio which is comprised of 40% of Stock A and 60% of Stock B. What is the standard deviation of this portfolio?
$\begin{array}{lccc}\text { State of the Economy } & \text { Probability } & \text { A } & \text { B } \\\text { Boom } & .15 & 22 \% & 19\% \\\text { Normal } & .80 & 12\% & 10\% \\\text { Recession } & .05 & -26 \% & -4\%\end{array}$

• A)4.39%
• B)5.68%
• C)6.41%
• D)7.14%
• E)9.08%

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Definitions:

Breakdown Maintenance

Maintenance performed after equipment failure or breakdown to restore it to operational condition.

Two-Component Process

A process consisting of two distinct parts or stages that together complete a task or produce a product.

Success Rate

The percentage of attempts or operations that are successful, often used as a measure of efficiency or effectiveness.

MTBF

Mean Time Between Failures, a reliability term used to predict the time elapsed between inherent failures of a system during operation.