A Portfolio Is Equally Weighted

question 36

Multiple Choice

A portfolio is equally weighted.Security One has a standard deviation of 10 percent.Security Two has a standard deviation of 8 percent.The securities have a covariance of .4254.What is the portfolio variance?

• A).2209
• B).0061
• C).8549
• D).8590
• E).2168

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Definitions:

Discrete Random Variables

Variables in statistical analysis that can take on a countable number of distinct values, often representing occurrences.

Continuous Random Variables

Variables that can take on an infinite number of values within a given range.

Probability Density

A function that describes the relative likelihood for a random variable to take on a given value.

Probability Density Function

A mathematical expression that defines the probability of a continuous random variable assuming a specific value.