Stock a Has a Standard Deviation of 15 Percent Per

question 55

Multiple Choice

Stock A has a standard deviation of 15 percent per year and stock B has a standard deviation of 8 percent per year.The correlation between stock A and stock B is .40.You have a portfolio of these two stocks wherein stock B has a portfolio weight of 40 percent.What is your portfolio variance?

• A).01143
• B).01214
• C).01329
• D).01437
• E).01470

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Definitions:

Criteria

Standards or principles by which something is judged or decisions are made.

Decision Process

The decision process pertains to the stages and considerations involved in making choices, ranging from problem recognition to evaluation of alternatives and the final decision.

Subordinate Level

Refers to a lower or secondary level or position in a hierarchy or organization.

Product Knowledge

Understanding specific details, benefits, and functions of a product, crucial for marketing teams and sales professionals to effectively promote and sell it.