What Is the Standard Deviation of a Portfolio Which Is

question 95

Multiple Choice

What is the standard deviation of a portfolio which is invested 20% in stock A, 30% in stock B and 50% in stock C?
$\begin{array}{llcc} \text { State of } & \text { Probability of } & \underline{\text { Returns if State Occurs }} \\\underline{ \text { Economy }} & \underline{\text { State of Economy }} & \underline{\text {Stock A\quad Stock B\quad Stock C}} \\ \text {Boom } & 10\% &15\% \quad \quad 10\%\quad \quad 5\%\\ \text { Normal} & 70\%& 9\%\quad \quad 6\%\quad \quad 7\%\\ \text { Recession } & 20\%&-14\%\quad \quad 2\%\quad \quad 8\% \\\end{array}$

• A)0.6%
• B)0.9%
• C)1.8%
• D)2.2%
• E)4.9%

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Definitions:

DNA Called Genes

Segments of DNA that carry the genetic information necessary for the coding of proteins and are inherited from one generation to another.

Chromosomes

Filamentous entities situated in the nucleus of both animal and plant cells, composed of protein and a solitary DNA molecule, responsible for transmitting genetic data.

Segments

Divisions or parts of a whole, often used in reference to parts of organizations, markets, or society.

Interaction

The interplay that occurs when the effect of one factor (such as environment) depends on another factor (such as heredity).