A Portfolio Has 30% of Its Value in IBM Shares

question 8

Multiple Choice

A portfolio has 30% of its value in IBM shares and the rest in Microsoft (MSFT) . The volatility of IBM and MSFT are 35% and 30%, respectively, and the correlation between IBM and MSFT is 0.5. What is the standard deviation of the portfolio?

• A) 23.61%
• B) 27.78%
• C) 31.95%
• D) 30.56%

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Definitions:

Cultural Competence

The ability to understand, appreciate, and interact effectively with people of different cultures and socio-economic backgrounds.

Core Values

Fundamental beliefs or guiding principles that dictate behavior and action within an organization or individual’s life.

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Hidden Stereotypes

Unacknowledged or unconscious biases that can influence perceptions and behavior towards certain groups of people.