Stock a Has an Expected Return of 10% and a Standard

question 90

Multiple Choice

Stock A has an expected return of 10% and a standard deviation of 10%.Stock B has an expected return of 15% and a standard deviation of 20%.The two stocks are perfectly negatively correlated ( = -1) .What set of weights yields a portfolio with a zero variance?

• A) 2/3 in Stock A; 1/3 in Stock B
• B) 2/3 in Stock B; 1/3 in Stock A
• C) 2 in Stock A; -1 in Stock B
• D) 2 in Stock B; -1 in Stock A
• E) None of the above.

---

Definitions:

Allergic Reaction

an immune system response to a foreign substance that's not typically harmful to your body, like pollen, food, or pet dander.

Allergen

A substance that stimulates an allergic reaction.

IgE

Immunoglobulin E, a class of antibodies produced by the immune system in response to allergens, responsible for allergic reactions.

Mast Cell

A type of white blood cell part of the immune system, containing granules rich in histamine and heparin, involved in allergic reactions and inflammation.