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:

Quantity

The property that can exist as a magnitude or multitude, often measured and used for describing the amount of something.

Timeliness

The characteristic of being done at the right or appropriate time, often essential for efficiency and effectiveness.

Recognition

The acknowledgment or appreciation of someone's efforts, achievements, or status.

Feedback

is the information given to individuals or systems about their performance, intended to reinforce strengths or improve weaknesses.