Instruction 16.2: Use the Information to Answer the Following Question(s)

question 12

Multiple Choice

Instruction 16.2:
Use the information to answer the following question(s) .
A U.S. investor is considering a portfolio consisting of 60% invested in the U.S. equity index fund and 40% invested in the British equity index fund. The expected returns for the funds are 10% for the U.S. and 8% for the British, standard deviations of 20% for the U.S. and 18% for the British, and a correlation coefficient of 0.15 between the U.S. and British equity funds.
-Refer to Instruction 16.2. What is standard deviation of the proposed portfolio?

• A) 38.00
• B) 19.20
• C) 19.00
• D) 14.45

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