What Is the Standard Deviation of the Returns on a Portfolio

question 102

Multiple Choice

What is the standard deviation of the returns on a portfolio that is invested in stocks A, B, and C? Twenty five percent of the portfolio is invested in stock A and 40 percent is invested in stock C.

• A)6.31 percent
• B)6.49 percent
• C)7.40 percent
• D) 7.83 percent
• E)8.72 percent

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Definitions:

Long-Run Supply

The relationship between the price of a product and the quantity of the product a firm is willing to supply, considering all inputs are variable and adjusting to new market conditions over time.

Resource Supply

The total availability of resources, such as raw materials, labor, and capital, which can be used for production.

Marginal Revenue Product

The additional revenue generated by employing an additional unit of a resource, such as labor or capital.

Input Price

The cost associated with purchasing the raw materials or factors of production used in the creation of goods or services.