A Stock Fund Has a Standard Deviation of 18 Percent

question 35

Multiple Choice

A stock fund has a standard deviation of 18 percent and a bond fund has a standard deviation of 11 percent. The correlation of the two funds is .24. What is the approximate weight of the stock fund in the minimum variance portfolio?

• A) 16 percent
• B) 19 percent
• C) 21 percent
• D) 24 percent
• E) 27 percent

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Definitions:

Jungian

Pertaining to the psychological theories of Carl Jung, focusing on concepts such as the collective unconscious, archetypes, and individuation process.

Ego Identity

Erikson's theory about the self-image formed during adolescence, integrating various aspects of personality, values, and aspirations.

Individuation

A psychological process in which an individual becomes distinct and autonomous by integrating different aspects of the self, a concept often associated with Carl Jung.

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A professional who has the necessary skills, knowledge, and attitude to effectively deliver services to a diverse clientele.