From the Following Information,calculate the Expected Return and Standard Deviation

question 52

Multiple Choice

From the following information,calculate the expected return and standard deviation of a portfolio that consists of 60% of Security A (expected return of 0.10 and standard deviation of 0.03) and 40% of Security B (expected return of 0.20 and standard deviation of 0.05) ,assuming the co-variance between A and B is -0.0012.

• A)E(R)= 0.152,σ = 0.161
• B)E(R)= 0.138,σ = 0.012
• C)E(R)= 0.14,σ = 0.085
• D)E(R)= 0.14,σ = 0.012

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Definitions:

Market Price

The current price at which an asset or service can be bought or sold.

Journal Entries

Records of financial transactions in the accounting system, showing the accounts affected and the amounts for each transaction.

Available for Sale

A classification for financial assets indicating they are not primarily held for trading or immediate sale but may be sold in the future.

Largest Stockholder

The individual or entity that owns the largest number of shares in a corporation, giving them significant influence over its management.