What Is the Standard Deviation of a Portfolio Which Is $\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad$

question 113

Multiple Choice

What is the standard deviation of a portfolio which is comprised of €4,500 invested in share S and €3,000 in share T?
$\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad$ Returns if
$\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad$ State Occurs
$\begin{array}{|l|l|l|l|}\hline \text { State of Economy } & \text { Probability of State of Economy } & \text { ShareS } & \text { Share T } \\\hline \text { Boom } & 10 \% & 12 \% & 4 \% \\\hline \text { Normal } & 65 \% & 9 \% & 6 \% \\\hline \text { Recession } & 25 \% & 2 \% & 9 \% \\\hline\end{array}$

• A)1.4%
• B)1.9%
• C)2.6%
• D)5.7%
• E)7.2%

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Definitions:

Written Contract

An agreement between two or more parties that is expressed in written form and is intended to be enforceable by law.

Statute of Frauds

The Statute of Frauds is a legal principle requiring certain types of contracts to be in writing and signed to be enforceable.

Partial-Performance Exception

A legal doctrine allowing enforcement of an oral contract, contrary to the Statute of Frauds, based on partial completion of agreed terms.

Statute of Frauds

A legal principle requiring certain types of contracts to be written and signed to be enforceable.