Suppose You Own a Two-Security Portfolio

question 88

Multiple Choice

Suppose you own a two-security portfolio.You have 35.0% of your money invested in Security X and the remainder in Security Y.The standard deviations of Securities X and Y are 10.0% and 15.0%, respectively.What is the correlation between the two securities if the portfolio variance is 0.013225?

• A)0.0055
• B)0.0137
• C)0.3654
• D)0.9148

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Definitions:

Lessee

The party in a lease agreement that gains the right to use an asset in exchange for making payments to the lessor.

Lease

A contractual agreement allowing the lessee to use an asset owned by the lessor for a specified period in exchange for payment.

Lessee

An individual or entity that leases an asset from another, agreeing to make payments in exchange for using the asset for a specified period.

Lessee

An individual or entity that leases or rents property or equipment from another, known as the lessor.