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:

Cash Dividends

Payments made out of a corporation's earnings to its shareholders, typically distributed as a fixed amount per share of stock.

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for non-cash transactions and changes in working capital to calculate cash flow from operating activities.

Operating Activities

Business activities related to the day-to-day functions of a company involved in producing and delivering its products or services.

Cash Dividends

Payments made by a company to its shareholders out of its profits or reserves.