Stock a Has Exhibited a Standard Deviation in Stock Returns

question 22

Multiple Choice

Stock A has exhibited a standard deviation in stock returns of 0.5, whereas Stock B has exhibited a standard deviation of 0.6. The correlation coefficient between the stock returns is 0.5. What is the variance of a portfolio composed of 70 percent Stock A and 30 percent Stock B?

• A) 0.1549
• B) 0.2179
• C) 0.4668
• D) 0.5500

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Definitions:

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A prominent place in people’s memories that triggers a response without them having to put any thought into it.

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