Stock S Has an Expected Return of 8 Percent and a Standard

question 86

Multiple Choice

Stock S has an expected return of 8 percent and a standard deviation of 20 percent. Stock B has an expected return of 3 percent and a standard deviation of 12 percent. If the correlation of the two stocks is 0.15, what is the expected return of the minimum variance portfolio?

• A) 15.40%
• B) 17.71%
• C) 4.15%
• D) 10.37%
• E) 6.91%

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Definitions:

Consumers

Individuals who purchase goods and services for personal use.

Mission Statement

A concise description of a company’s purpose, its goals, and how it serves its stakeholders.

Orientation Session

A meeting or programme designed to introduce new members to a company, institution, or the specifics of a new role.

Shareholder Review

A process or meeting in which shareholders assess the performance, strategy, and prospects of a company.