Stock a Has an Expected Return of 15%,and Stock B

question 64

Multiple Choice

Stock A has an expected return of 15%,and stock B has an expected return of 6%.However,the risk of stock A as measured by its variance is 3 times that of stock B.If the two stocks are combined equally in a portfolio,what would be the portfolio's expected return?

• A)4.25%
• B)10.5%
• C)20%
• D)Greater than 20%
• E)Need more information to answer.

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Definitions:

Hoarding Of Expertise

The practice of keeping knowledge, skills, or information confined to an individual or a limited group, preventing wider dissemination and use.

Knowledge Transfer

The process through which skills, knowledge, technologies, or methods are passed from one individual or organization to another.

Needle-In-A-Haystack Problem

A metaphorical expression referring to the difficulty of finding a specific item or solution in a vast space or among many possibilities.

Knowledge Transfer

The process of sharing knowledge, skills, and expertise among individuals or organizations.