The Expected Returns for Bumpy Inc

question 75

Multiple Choice

The expected returns for Bumpy Inc.and Bouncy Inc.are 20.0% and 8.0%, respectively.The standard deviation is 35.0% for Bumpy and 16.0% for Bouncy.What is the portfolio standard deviation if 45.0% of the portfolio is in Bumpy and the two securities have perfect negative correlation?

• A)4.60%
• B)6.95%
• C)0.21%
• D)0.48%

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