Consider the Following Expected Returns, Volatilities, and Correlations: the Volatility

question 98

Multiple Choice

Consider the following expected returns, volatilities, and correlations: The volatility of a portfolio that is equally invested in Duke Energy and Microsoft is closest to ________.

• A)8.1%
• B)9.0%
• C)10.8%
• D)5.4%

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Definitions:

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the asset's consumption, wear and tear, or obsolescence.

Prepaid Insurance

An asset account on the balance sheet representing insurance paid in advance that provides coverage over future periods.

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Accounts Receivable

Money owed to a business by its clients or customers for goods or services provided on credit.