Suppose You Observed the Following Data on Two Securities: Mars

question 43

Multiple Choice

Suppose you observed the following data on two securities: Mars and Venus:

You short sold 200 shares of Mars at $20 per share and purchased 400 shares of Venus at $25 per share to increase the possible return on the portfolio.The correlation between the securities is 0.30.What is the standard deviation of the portfolio?

• A) 7.06%
• B) 26.56%
• C) 32.45%
• D) 56.96%

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Definitions:

Division

The fallacy of inferring that a part has a property merely because the whole has that property.

Generalizations

Statements or conclusions drawn from specific cases or instances that extend to broader or more general conditions.

Exceptions

Conditions or cases that do not follow the general rule or definition.

Mathematical Principles

Fundamental truths or propositions that form the basis for a system of mathematics.