Stocks a and B Each Have an Expected Return of 15

question 103

Multiple Choice

Stocks A and B each have an expected return of 15%, a standard deviation of 20%, and a beta of 1.2.The returns on the two stocks have a correlation coefficient of +0.6.Your portfolio consists of 50% A and 50% B.Which of the following statements is CORRECT?

• A) The portfolio's expected return is 15%.
• B) The portfolio's standard deviation is greater than 20%.
• C) The portfolio's beta is greater than 1.2.
• D) The portfolio's standard deviation is 20%.
• E) The portfolio's beta is less than 1.2.

Interpret the impact of monetary policy tools on the banking sector and the overall economy.

Explain the concept of leverage within banks and its significance in the context of financial stability.

Grasp the theoretical and practical aspects of the functions of money in an economic system.

Distinguish between different types of money and understand the role of the Federal Reserve System in managing monetary policy.

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