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A College Student Owns Two Securities: Apple and Coca- Cola

question 102

Multiple Choice

A college student owns two securities: Apple and Coca- Cola.Apple has an expected return of 15 percent with a standard deviation of those returns being 11 percent.Coca-Cola has an expected return of 12 percent, and a standard deviation of 7 percent.The correlation of returns between Apple and Coca-Cola is 0.81.If the portfolio consist of $6,000 in Coca-Cola and $4,000 in Apple, what is the expected standard deviation of portfolio returns?


Definitions:

Fixed Cost

describes expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Variable Cost

Costs that change in proportion to the level of activity or volume of production in a business.

Average Fixed Cost

The constant expenses associated with production, when divided by the volume of goods produced, reduce as the production volume goes up.

Instructional Modules

Structured units designed to provide education on a particular topic, often part of a larger course or curriculum.

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