If You Want to Know the Portfolio Standard Deviation for a Three

question 4

Multiple Choice

If you want to know the portfolio standard deviation for a three share portfolio you will have to ________.

• A)calculate two covariances and one trivariance
• B)calculate only two covariances
• C)calculate three covariances
• D)average the variances of the individual shares

---

Definitions:

Direct Materials

Raw materials that are directly traceable to the manufacturing of a specific product and included in the product's cost calculation.

Break-Even Point

The level of production or sales volume at which total revenues equal total costs, resulting in zero profit or loss.

Contribution Margin Ratio

The ratio of contribution margin to sales revenue, indicating the percentage of each sales dollar available to cover fixed costs and generate profit.

Contribution Margin Ratio

A financial metric that measures how much of a company's revenue is available to cover its variable costs and contribute to its fixed costs.