A Portfolio Has 25% of Its Funds Invested in Security

question 31

Multiple Choice

A portfolio has 25% of its funds invested in Security C and 75% of its funds invested in Security D. Security C has an expected return of 8% and a standard deviation of 6%. Security B has an expected return of 10% and a standard deviation of 10%. The securities have a coefficient of correlation of.6. Which of the following values is closest to portfolio return and variance?

• A) .095; .001675.
• B) .095; .0072.
• C) .100; .00849.
• D) .090;.0081.

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Definitions:

Parliament

The supreme legislative body in many countries, typically comprising two houses (upper and lower) that are responsible for making laws and overseeing the government.

Virtue

Moral excellence and righteousness; an inclination to do good.

American Society

A diverse and dynamic society consisting of individuals from various racial, ethnic, and cultural backgrounds within the United States.

Political Authority

Political authority refers to the power and legitimate right granted to governments or leaders to govern and enforce laws within a society.