What Is the Variance of Return of a Three-Stock Portfolio

question 8

Multiple Choice

What is the variance of return of a three-stock portfolio (with unequal weights 25%, 50% and 25%) that produced returns of 20%, 25% and 30%, respectively?

• A)10.00
• B)12.50
• C)15.00
• D)20.00 Mean =

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Definitions:

Cumulative Cash Deficit

The total amount by which a company's cash outflows exceed its cash inflows over a certain period, indicating a need for additional financing or cost reductions.

External Funding

Capital that comes from outside of a company, including loans, lines of credit, or equity investments from external investors.

Financial Distress

A situation where a company is struggling to meet its financial obligations and is at risk of bankruptcy.