Stock a Has a Standard Deviation of 15 Percent Per

question 73

Multiple Choice

Stock A has a standard deviation of 15 percent per year and stock B has a standard deviation of 21 percent per year. The correlation between stock A and stock B is .32. You have a portfolio of these two stocks wherein stock B has a portfolio weight of 60 percent. What is your portfolio standard deviation?

• A) 14.87 percent
• B) 15.59 percent
• C) 16.91 percent
• D) 17.45 percent
• E) 18.03 percent

---

Definitions:

Summary Judgment

A legal determination made by a court without a full trial, typically ruling that no material facts are in dispute and that one party is entitled to judgment as a matter of law.

Pleadings

Formal statements made by the plaintiff and the defendant in a lawsuit that detail the facts, allegations, and defenses involved in the litigation; the complaint and answer are part of the pleadings.

Negligence

The failure to exercise the care that a reasonably prudent person would exercise in similar circumstances, leading to unintended injury to another party.

Certified Mail

A postal service that provides the sender with a mailing receipt and electronic verification that a letter or package has been delivered.