An Investor Can Design a Risky Portfolio Based on Two

question 67

Multiple Choice

An investor can design a risky portfolio based on two stocks, A and B. The standard deviation of return on stock A is 20%, while the standard deviation on stock B is 15%. The correlation coefficient between the returns on A and B is 0%. The rate of return for stocks A and B is 20% and 10% respectively. The expected return on the minimum-variance portfolio is approximately ________.

• A) 10%
• B) 13.6%
• C) 15%
• D) 19.41%

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Definitions:

Variable-interval

A reinforcement timetable in which a response is reinforced following a random duration of time.

Variable-ratio Schedule

A reinforcement schedule where a response is reinforced after an unpredictable number of responses, making it highly resistant to extinction.

Specific Number

A specific number refers to a distinct and particular numerical value, identified without ambiguity.

Randomly Varying

Exhibiting changes that lack a specific pattern, direction, or expectation, occurring in a manner that cannot be predicted.