Your Portfolio Has 25% of Its Value Invested in Bombardier

question 18

Multiple Choice

Your portfolio has 25% of its value invested in Bombardier and the remainder invested in Lululemon.Bombardier stock has a volatility of 30%,while Lululemon stock has a volatility of 18%.If the correlation between Bombardier and Lululemon is 0.2,what is the standard deviation of your portfolio?

• A)16.7%
• B)24%
• C)2.8%
• D)21%
• E)46.1%

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Definitions:

Defined Contribution Plan

A type of retirement plan in which the employer, employee, or both make contributions on a regular basis, but the final benefit received by the employee depends on the plan's investment performance.

Length of Service

The duration of time an employee has worked for a particular employer, often affecting their eligibility for certain benefits or recognition.

Vesting

A provision in employer-provided retirement plans that gives workers the right to a pension after a specified number of years of service.

Pension Benefits

Payments made to employees after retirement, based on years of service and salary history, as part of a retirement plan.