The Variance of a Portfolio of Two Investments Will Be

question 39

True/False

The variance of a portfolio of two investments will be equal to the sum of the variances of the two investments plus twice the covariance between the investments.

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Definitions:

Upper-Class White

A socio-demographic term referring to individuals who belong to the highest socioeconomic class within a given society and who are of Caucasian ethnicity.

Reaction Range

The concept that genetic potential limits the extent to which an environment can influence the expression of a trait, with individuals varying in their response to the same environment.

Middle-Class Minority

A demographic group within the middle class that is part of a racial, ethnic, or cultural minority.

Practical Intelligence

The ability to solve everyday problems by utilizing knowledge gained from experience, rather than through formal academic instruction.