USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 14

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Stocks A and B have a correlation coefficient of -0.8. The stocks' expected returns and standard deviations are in the table below. A portfolio consisting of 40% of stock A and 60% of stock B is constructed.

-Refer to Exhibit 6.14. What is the standard deviation of the stock A and B portfolio?

• A) 0.0%
• B) 0.5%
• C) 4.1%
• D) 6.9%
• E) 20.3%

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Definitions:

Romantic Feelings

Emotions and affections that are associated with love and attraction towards another person.

Public Displays

Acts of expressing behavior or conveying messages in accessible or viewable public spaces.

Company Email

An electronic mail system used by employees within an organization to communicate internally and externally for business purposes.

Grapevine

An informal communication network within an organization or community, known for its speed and efficiency in spreading information or rumors.