What Is the Variance of the Returns on a Portfolio

question 108

Multiple Choice

What is the variance of the returns on a portfolio comprised of $5,400 of stock G and $6,600 of stock H?

• A).000709
• B).000848
• C).001097
• D).001254
• E).001468

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Definitions:

Unsecured Liability

A financial obligation that does not have collateral backing, meaning creditors may not have claims on the borrower's assets if the debt is not repaid.

Salaried Employees

Workers who are paid a fixed regular amount, typically monthly or biweekly, regardless of hours worked, as opposed to being paid hourly.

Liquidation

The process of winding up a company's operations, selling off its assets, and distributing the proceeds to creditors and shareholders.

Stockholders' Equity

Represents the owners' residual interest in a corporation's assets after deducting its liabilities, often referred to as shareholders' equity or owners' equity.