A Portfolio Is Equally Weighted

question 43

Multiple Choice

A portfolio is equally weighted.Stock D has a standard deviation of 11.7,percent and Stock E has a standard deviation of 5.9 percent.The securities have a covariance of 0.0254.What is the portfolio variance?

• A)0.012209
• B)0.009006
• C)0.010549
• D)0.008590
• E)0.016993

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Definitions:

Proportion

A statistical measure that reflects the size of a part compared to the whole, expressed as a fraction, percentage, or ratio.

Nonconforming

Refers to items, processes, or conditions that do not meet predetermined standards or specifications.

Samples

A portion or subset of a larger group or population used in statistical analysis to represent the whole.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, indicating how spread out the values are from the mean.