If You Want to Know the Portfolio Standard Deviation for a Three-Stock

question 33

Multiple Choice

If you want to know the portfolio standard deviation for a three-stock portfolio, you will have to ________.

• A) calculate two covariances and one trivariance
• B) calculate only two covariances
• C) calculate three covariances
• D) average the variances of the individual stocks

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Definitions:

Cats

Domesticated carnivorous mammals with soft fur, sharp claws, and keen night vision, known for their agility and often kept as pets.

Nail Polish

A lacquer applied to human fingernails or toenails to decorate and protect the nail plates.

Beeswax

A natural wax produced by honey bees, commonly used in cosmetics, candles, and as a food additive or coating.

Henna

A dye prepared from the plant Lawsonia inermis, used for coloring hair or drawing temporary body art.