Stock a Has a Standard Deviation of 25% Per Year

question 8

Multiple Choice

Stock A has a standard deviation of 25% per year and Stock B has a standard deviation of 20% per year. The correlation between Stock A and Stock B is .30. You have a portfolio of these two stocks wherein Stock B has a portfolio weight of 40%. What is your portfolio variance?

• A).03022
• B).03156
• C).03239
• D).03610
• E).03304

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Definitions:

Memory Deficits

Impairments in the ability to remember information or events, which can result from neurological conditions, injury, or psychological factors.

Brain Injury

Physical damage to the brain, which can result in temporary or permanent impairment of cognitive, physical, and psychosocial functions.

CHC Model

Stands for the Cattell-Horn-Carroll theory, a psychological theory that attempts to describe human cognitive abilities and their variations as a set of factors.

Fluid Reasoning

The capacity to think logically and solve problems in novel situations, independent of acquired knowledge.