Batman Stock Has Exhibited a Standard Deviation in Stock Returns

question 75

Multiple Choice

Batman Stock has exhibited a standard deviation in stock returns of 0.5, whereas Superman Stock 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 Batman and 30 percent Superman?

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

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Definitions:

Selfish Herds

A behavior in which individuals in a group position themselves in such a way to minimize their predation risk, benefiting from the presence of others as a shield.

Group Behavior

The behaviors and interactions that emerge from a collective of individuals within the same species, often influenced by social, environmental, and psychological factors.

Coefficient Of Relatedness

A measure indicating the probability of sharing genes between two individuals due to common ancestry.

Somatosensory Cortex

An area of the brain in the parietal lobe responsible for processing sensory information from various parts of the body, including touch, temperature, and pain.