You Put Half of Your Money in a Stock Portfolio

question 45

Multiple Choice

You put half of your money in a stock portfolio that has an expected return of 14% and a standard deviation of 24%.You put the rest of you money in a risky bond portfolio that has an expected return of 6% and a standard deviation of 12%.The stock and bond portfolio have a correlation 0.55.The standard deviation of the resulting portfolio will be ________________.

• A) more than 18% but less than 24%
• B) equal to 18%
• C) more than 12% but less than 18%
• D) equal to 12%

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Definitions:

Histogram Chart

A type of graph that represents the distribution of data sets across different intervals or bins.

Distribution of Data

The way numerical or categorical data points are spread out or dispersed across a range or scale in a dataset.

Quarter 1 Data

Information or statistical data that is specifically related to the first quarter of a financial or calendar year.

Clustered Column - Line Chart

A hybrid chart in data visualization that combines a clustered column chart and a line chart to display different types of information simultaneously.