What Is the Variance of Return of a Three-Stock Portfolio

question 68

Multiple Choice

What is the variance of return of a three-stock portfolio (each stock being equally weighted) that produced returns of 20%,25%,and 30%?

• A) 16.67
• B) 33.33
• C) 50.00
• D) 100.00

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Definitions:

Perfectly Inelastic Demand Curve

A perfectly vertical demand curve; no matter what the price is, the quantity demanded remains the same.

Very Inelastic

Describes a situation in which the demand for a product or service shows little to no response to changes in price.

Market Period

An extremely short duration in which the supply of a good is fixed, unable to adjust to changes in demand, typically because the period is so brief.

Productive Capacity

The maximum output a firm or economy can produce when using all available resources efficiently.