A Portfolio Has 40% of Its Value in IBM Shares

question 57

Multiple Choice

A portfolio has 40% of its value in IBM shares and the rest in Microsoft (MSFT) . The volatility of IBM and MSFT are 40% and 30%, respectively, and the correlation between IBM and MSFT is -0.3. What is the standard deviation of the portfolio?

• A) 19.17%
• B) 18.16%
• C) 22.20%
• D) 20.18%

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Definitions:

Frontal Lobe

The part of the brain involved in decision making, problem solving, control of purposeful behaviors, consciousness, and emotions.

Insula

A region of the brain located deep within the lateral sulci, involved in diverse functions including emotion, homeostasis, and cognitive processing.

Upper Motor Neurons

Neural cells in the brain and spinal cord that initiate and coordinate movement by sending signals to lower motor neurons.

Visual Cortex

The region of the brain located in the occipital lobe that processes visual information.