Use the Following Information to Answer the Question(s)below

question 54

Multiple Choice

Use the following information to answer the question(s) below.
Suppose that all stocks can be grouped into two mutually exclusive portfolios (with each stock appearing in only one portfolio) : growth stocks and value stocks.Assume that these two portfolios are equal in size (market value) ,the correlation of their returns is equal to 0.6,and the portfolios have the following characteristics: The risk-free rate is 3.5%.
-The volatility on the market portfolio (which is a 50-50 combination of the value and growth portfolios) is closest to:

• A)13.5%.
• B)15.2%.
• C)17.1%.
• D)19.0%.

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Definitions:

Alpha Particle Emission

A type of radioactive decay in which an atomic nucleus releases an alpha particle (2 protons and 2 neutrons) and transforms into an atom with a mass number 4 units less and atomic number 2 units less.

Beta Particle Emission

A radioactive decay process where a beta particle (electron or positron) is emitted from an atomic nucleus.

Alpha Particle Emission

A type of radioactive decay in which an unstable atomic nucleus emits an alpha particle (2 protons and 2 neutrons) to form a new nucleus, decreasing its atomic number by 2 and mass number by 4.

Positron Particle Emission

A type of beta decay in which a positron is ejected from an atomic nucleus, transforming a proton into a neutron.