Security One Has a Standard Deviation of 6

question 37

Multiple Choice

Security One has a standard deviation of 6. Security Two has a standard deviation of 12. The securities have a coefficient of correlation of .5. Which of the following values is closest to portfolio variance?

• A) 81.
• B) 90.
• C) 27.
• D) 6561.

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Definitions:

Zone of Tolerance

the range within which customers are willing to accept variations in a product or service's quality.

Customer Expectations

Customer Expectations refer to the preconceived notions or standards that consumers have regarding the quality, performance, and value of a product or service before making a purchase.

Variability in Performance

The degree to which the outcomes or results of a process, such as service delivery, can differ over time.

Symbolic

Serving as a representation or symbol of ideas, values, or concepts without having a direct practical application.