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A Portfolio Is Composed of Two Stocks,A and B

question 40

Multiple Choice

A portfolio is composed of two stocks,A and B. Stock A has a standard deviation of return of 35% while stock B has a standard deviation of return of 15%. The correlation coefficient between the returns on A and B is 0.45. Stock A comprises 40% of the portfolio while stock B comprises 60% of the portfolio. The standard deviation of the return on this portfolio is _________.


Definitions:

Reactants

Chemicals that exist before a reaction takes place, consumed in the process to yield the products.

Catalyst

An agent that boosts the pace of chemical reactions without being permanently altered in the process.

Reaction Rate

The speed at which a chemical reaction occurs, influenced by factors like temperature, concentration, and catalysts.

Speeds Up

Increases the rate or velocity of an object or a process.

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