A Portfolio Has 50% of Its Value in IBM Shares

question 82

Multiple Choice

A portfolio has 50% of its value in IBM shares and the rest in Microsoft (MSFT) .The volatility of IBM and MSFT are 39% and 35%,respectively,and the correlation between IBM and MSFT is 0.What is the standard deviation of the portfolio?

• A)22..7%
• B)29.5%
• C)37.5%
• D)26.2%

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Definitions:

Equal Chance

The concept that every participant or element in a given situation has the same probability of being selected or occurring.

Psychologist Decide

involves the process by which psychologists make determinations or judgments based on psychological assessment, research, and clinical evidence.

Observations

The action or process of closely monitoring or noticing something or someone, often to gather data or come to a conclusion.

Hypotheses

Proposed explanations for a phenomenon, put forward as bases for further investigation, validation, or refutation.