A Portfolio Has 25% of Its Funds Invested in Security

question 124

Multiple Choice

A portfolio has 25% of its funds invested in Security C and 75% of its funds invested in Security D. Security C has an expected return of 8% and a standard deviation of 6%. Security D has an expected return of 10% and a standard deviation of 10%. The securities have a coefficient of correlation of 0.6. Which of the following values is closest to portfolio return and variance?

• A) .090; .0081
• B) .095; .001675
• C) .095; .0072
• D) .100; .00849
• E) Cannot calculate without the number of covariance terms.

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Definitions:

Self-Managed Work Team

A group of employees tasked with a particular job or project, which operates with minimal or no supervision, often responsible for their own management and leadership.

Social Skills

Abilities used to communicate and interact effectively and harmoniously with others, including verbal and non-verbal communication, empathy, and active listening.

Intrinsic Motivation

The drive to engage in an activity for its own sake, enjoying the process and learning rather than for the sake of some external reward.

Social Loafing

The phenomenon where individuals exert less effort when working in groups than when working alone.