A Portfolio Consists of Stock C with an Expected Return

question 5

Multiple Choice

A portfolio consists of Stock C with an expected return of 10 percent and a standard deviation of 45 percent and Stock D with an expected return of 13 percent and a standard deviation of 56 percent. The portfolio is equally-weighted between the two stocks, and the correlation between the two stocks is zero. What is the smallest expected loss of the portfolio over the next month with a probability of 5 percent?

• A) -19.62%
• B) -14.32%
• C) -8.43%
• D) -16.10%
• E) -11.37%

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Definitions:

Cold War Ideology

The set of beliefs and attitudes that defined the geopolitical tension and ideological conflict between the Soviet Union and the United States, and their respective allies, after World War II until the dissolution of the Soviet Union.

American Cold War

The period of geopolitical tension and ideological conflict between the United States and the Soviet Union after World War II, characterized by threats, propaganda, and other measures short of open warfare.

Capitalism

An economic system where trade, industry, and the means of production are largely or entirely privately owned and operated for profit.

Colonizers

Individuals or groups who establish control over foreign lands and people, often exploiting, displacing, or exterminating the indigenous populations in the process.