A Stock Fund Has a Standard Deviation of 16 Percent

question 27

Multiple Choice

A stock fund has a standard deviation of 16 percent and a bond fund has a standard deviation of 4 percent.The correlation of the two funds is .11.What is the weight of the stock fund in the minimum variance portfolio?

• A) 3.47 percent
• B) 6.48 percent
• C) 11.92 percent
• D) 14.67 percent
• E) 18.22 percent

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Definitions:

Natural Settings

Environments or situations that occur naturally without human intervention or artificiality.

Quality Of Work

The measure of excellence or state of being free from defects, deficiencies, and significant variations in a product or service.

Good Follower

A person who supports and is guided by another person or by a group, showing commitment and adaptability.

Productivity Rate

A measure of the efficiency of production or the amount of output generated per unit of input.