Consider the Following Portfolio of Assets

question 4

Multiple Choice

Consider the following portfolio of assets:

What is the variance of the portfolio (round to two decimals) ?

• A)(0.45) 2 (36.60%) + (0.55) 2 (76.56%) + (0.45)(0.55)(-0.2) * (6.05%)(8.75%) = 27.95
• B)(0.45) 2 (36.60%) + (0.55) 2 (76.56%) + 2(0.45)(0.55)(-0.2) * (6.05%) (8.75%) = 25.33
• C)(0.45)(36.60%) + (0.55)(76.56%) + 2(0.45) 2 (0.55)
• D)(-.2) *(6.05%)(8.75%) = 57.28
• E)(0.45)(36.60%) + (0.55)(76.56%) + 2(0.45)(0.55)(-0.2) * (6.05%)(8.75%) = 53.34

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Definitions:

Confined

Restricted in space or area; being in a situation that limits freedom of movement or action.

Herbert Simon

An American economist, political scientist, and cognitive psychologist known for his contributions to the theory of decision-making and problem-solving in organizations.

Emotions

Complex psychological states that involve physiological arousal, expressive behaviors, and conscious experience.

Conscious

The state of being aware of and able to think about one's surroundings, thoughts, and feelings.