THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION

question 113

Multiple Choice

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:
Investment A has an expected return of 8% with a standard deviation of 2.5%.Investment B has an expected return of 6% with a standard deviation of 1.2%.Assume you invest equally in both investments and that the rates of return are independent.
-What is the standard deviation of the return on your portfolio? Assume that the returns on the two investments are independent.

• A)2.77
• B)2.50
• C)7.69
• D)6.25

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Definitions:

Prospectors

Prospectors are individuals who search for mineral deposits, particularly gold and other precious metals, often in the context of historical gold rushes.

Mining Syndicates

Groups of investors or companies joined together for the purpose of resource extraction, particularly in the mining sector, pooling resources and sharing risks and profits.

Indian Affairs

Policies and actions relating to the management, interaction, and relations between the United States government and Native American tribes and individuals.

Royal Mounted Police

Refers to the Royal Canadian Mounted Police (RCMP), a national police service in Canada known for both community policing and federal law enforcement functions.