Use the table for the question(s) below.
Consider the following covariances between securities:
-The variance on a portfolio that is made up of a $6,000 investment in Microsoft stock and a $4,000 investment in Wal-Mart stock is closest to:
Definitions:
Closed Out
The process of finalizing all positions in a security or contract, effectively ending all obligations or engagements in those positions.
Hedge
An investment position intended to offset potential losses or gains that may be incurred by a companion investment, a common risk management strategy.
Speculator
An investor who engages in the buying and selling of financial instruments with the aim of profiting from short-term market fluctuations.
Futures Contract
A standardized legal agreement to buy or sell something at a predetermined price at a specified time in the future, typically traded on a futures exchange.
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