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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:

Income Inequality

Refers to the uneven distribution of income and wealth across the different participants in an economy.

In-kind Transfers

Non-cash benefits provided by the government to individuals, such as food stamps, housing assistance, and medical services, aimed at meeting basic needs.

Redistribution of Income

The transfer of income from certain individuals or groups to others through mechanisms like taxes, subsidies, and social welfare programs.

Equalizing Opportunities

Efforts or policies aimed at leveling the playing field so that individuals have equal chances to succeed, regardless of their background or circumstances.

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