Your Portfolio Has 50% of Its Value Invested in Bombardier

question 17

Multiple Choice

Your portfolio has 50% of its value invested in Bombardier and the remainder invested in Lululemon.Bombardier stock has a volatility of 25%,while Lululemon stock has a volatility of 10%.If the correlation between Bombardier and Lululemon is -0.1,what is the standard deviation of your portfolio?

• A)16.7%
• B)17.5%
• C)13%
• D)17.4%
• E)1.7%

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Definitions:

Self-monitoring

The practice of paying close attention to one's own behavior and responses in different situations, often to improve or adjust them.

Spotlight Effect

Overestimating others’ noticing and evaluating our appearance, performance, and blunders (as if we presume a spotlight shines on us).

Self-serving Bias

A common tendency to attribute positive events to one's own character but attribute negative events to external factors.

Defensive Self-esteem

A fragile form of self-esteem that is highly sensitive to perceived threats and criticism, often leading to aggressive or defensive reactions to protect self-worth.