Stock X Has a Standard Deviation of 21 Percent Per

question 82

Multiple Choice

Stock X has a standard deviation of 21 percent per year and stock Y has a standard deviation of 6 percent per year.The correlation between stock A and stock B is 0.38.You have a portfolio of these two stocks wherein stock X has a portfolio weight of 42 percent.What is your portfolio standard deviation?

• A) 8.89 percent
• B) 9.85 percent
• C) 10.64 percent
• D) 11.84 percent
• E) 12.92 percent

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Definitions:

Organisational Design

The process of structuring an organization in order to effectively manage resources, operations, and achieve goals.

Lateral Communication

The exchange of information, ideas, or requests between individuals at the same level within an organizational hierarchy.

Mechanistic and Organic Designs

Two contrasting organizational structures where mechanistic designs are rigid and hierarchical, suited for stable environments, whilst organic designs are more flexible and adaptive, ideal for dynamic environments.

Organic Design

A design philosophy that seeks to be holistic, fluid, and cohesive, often inspired by natural forms and processes.