You Put Half of Your Money in a Share Portfolio

question 26

Multiple Choice

You put half of your money in a share portfolio that has an expected return of 14% and a standard deviation of 24%. You put the rest of you money in a risky bond portfolio that has an expected return of 6% and a standard deviation of 12%. The share and bond portfolio have a correlation 0.55. The standard deviation of the resulting portfolio will be ________.

• A)more than 18% but less than 24%
• B)equal to 18%
• C)more than 12% but less than 18%
• D)equal to 12%

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