A Portfolio Is Composed of Two Shares, a and B

question 32

Multiple Choice

A portfolio is composed of two shares, A and B. Share A has a standard deviation of return of 24% while Share B has a standard deviation of return of 18%. Share A comprises 60% of the portfolio while Share B comprises 40% of the portfolio. If the variance of return on the portfolio is .0380, the correlation coefficient between the returns on A and B is ________.

• A)0.583
• B)0.225
• C)0.327
• D)0.128

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Definitions:

Visual Aids

Tools that use visual elements to enhance comprehension, presentation, or interpretation of information.

New Media

Digital forms of communication and content delivery, such as social media, websites, and streaming services, characterized by interactivity and user participation.

Retention Of Information

The ability to store and recall data, facts, or knowledge over time, often facilitated by learning strategies.

Typeface Variety

The range and diversity of font styles used in written communication to enhance readability and visual appeal.