The Stock of Alpha Company Has an Expected Return of 0.10

question 62

Multiple Choice

The stock of Alpha Company has an expected return of 0.10 and a standard deviation of 0.25.The stock of Gamma Company has an expected return of 0.16 and a standard deviation of 0.40.The correlation coefficient between the two stock's return is 0.2.If a portfolio consists of 40% of Alpha Company and 60% of Gamma Company,what's the expected return of the portfolio?

• A) 0.126
• B) 0.136
• C) 0.160
• D) 0.130

---

Definitions:

Subsidiary Ledger

A subsidiary ledger is a detailed ledger that contains account-specific information, supporting and connected to the general ledger for a comprehensive accounting system.

Sales Journal

A dedicated journal used to record a company's sales transactions, tracking the selling of goods and services.

Sales Revenue

The total amount of money generated from the sale of goods or services before any expenses are subtracted.

Credits

Accounting entries that increase liabilities or decrease assets, typically signaling the source of financing or revenue.