What Is the Standard Deviation of the Returns on a Portfolio

question 82

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:

Income Statement

A financial report that shows a company's revenues, expenses, and net income over a specific period, indicating financial performance.

Date Line

A hypothetical line on the earth's surface, generally following the 180° longitude, where the date changes as one travels east or west across it.

Accounting Cycle

The complete process of recording and processing all financial transactions of a company, from when the transaction occurs, to its representation in the financial statements.

Optional Step

A step in a process or procedure that is not required to be completed but may be performed based on individual preference or circumstances.