The Two Stocks in Your Portfolio, X and Y, Have

question 29

Multiple Choice

The two stocks in your portfolio, X and Y, have independent returns, so the correlation between them, r_XY is zero.Your portfolio consists of $50,000 invested in Stock X and $50,000 invested in Stock Y.Both stocks have an expected return of 15%, betas of 1.6, and standard deviations of 30%.Which of the following statements best describes the characteristics of your 2-stock portfolio?

• A) Your portfolio has a standard deviation less than 30%, and its beta is greater than 1.6.
• B) Your portfolio has a beta equal to 1.6, and its expected return is 15%.
• C) Your portfolio has a beta greater than 1.6, and its expected return is greater than 15%.
• D) Your portfolio has a standard deviation greater than 30% and a beta equal to 1.6.
• E) Your portfolio has a standard deviation of 30%, and its expected return is 15%.

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Definitions:

Full-Thickness Wounds

Wounds that extend through the dermis to affect deeper tissues and potentially muscle or bone, requiring more complex healing processes.

Healing Time

The duration required for the body to fully recover from an injury, surgery, or illness, which can vary based on the severity and individual health factors.

Periwound Erythema

Redness and inflammation occurring around the edges of a wound, often indicating infection or other complications in the healing process.

Dehiscence

The splitting or bursting open of a wound or surgical incision, often a complication after surgery.