A Portfolio Has 10% of Its Value in ASX Shares

question 40

Multiple Choice

A portfolio has 10% of its value in ASX shares and the rest in Woodside Petroleum (WPL) . The volatilities of ASX and WPL are 40% and 20%, respectively, and the correlation between ASX and WPL is 0.5. What is the standard deviation of the portfolio?

• A)21.67%
• B)20.23%
• C)20.30%
• D)21.35%

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Definitions:

Entry Barrier

Product or service feature that customers expect from organizations in a certain industry; an organization trying to enter this market must provide this product or service at a minimum to be able to compete.

Bank

A financial institution licensed to receive deposits, offer loans, and provide various financial services to individuals and businesses.

Buyer Power

The influence that customers have over a producing industry, often determining the market value and ensuring that services and products meet their needs.

Buyers

Individuals or entities that purchase goods or services for personal use or organizational needs.