Given the Following Information, What Is the Standard Deviation of the Returns

question 80

Multiple Choice

Given the following information, what is the standard deviation of the returns on a portfolio that is invested 40 percent in stock A, 35 percent in stock B, and the remainder in stock C?

• A) 11.86 percent
• B) 12.72 percent
• C) 13.16 percent
• D) 13.43 percent
• E) 13.57 percent

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Definitions:

Economic Profit

The difference between a firm's total revenues and its total costs, including both explicit and implicit costs, reflecting the total financial gain.

Perfectly Competitive Industry

A market structure characterized by many buyers and sellers, free entry and exit, homogeneous products, and perfect information, leading to price takers on both the supply and demand sides.

Demand Curve

A graph showing the relationship between the price of a good or service and the quantity demanded for it at various prices.

Perfectly Elastic

A state of demand or supply in which the quantity demanded or supplied changes infinitely with any change in price.