A Stock Fund Has a Standard Deviation of 28 Percent

question 55

Multiple Choice

A stock fund has a standard deviation of 28 percent and a bond fund has a standard deviation of 16 percent.The correlation of the two funds is .15.What is the approximate weight of the stock fund in the minimum variance portfolio?

• A) 11 percent
• B) 15 percent
• C) 21 percent
• D) 24 percent
• E) 27 percent

---

Definitions:

Graph

A visual representation of data designed to show relationships between different variables.

Quantity Demanded

The amount of a product that consumers are willing and able to purchase at a particular price, within a given time period.

Diagram

A simplified drawing showing the appearance, structure, or workings of something, often used to explain or clarify concepts or processes.

Excise Tax

This is a tax levied on specific goods, services, or transactions, usually to discourage their use or generate revenue from specific sectors.