Which of the Following Is a Correct Expression Concerning the Formula

question 54

Multiple Choice

Which of the following is a correct expression concerning the formula for the standard deviation of returns of a two asset portfolio where the correlation coefficient is positive?

• A) \(\sigma\)²rp < (W₁²\(\sigma\)₁² + W₂²\(\sigma\)₂²)
• B) \(\sigma\)²rp = (W₁²\(\sigma\)₁² + W₂²\(\sigma\)₂²)
• C) \(\sigma\)²rp = (W₁²  ₁² - W₂²\(\sigma\)₂²)
• D) \(\sigma\)²rp > (W₁²\(\sigma\)₁² + W₂²\(\sigma\)₂²)

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