The Stock of a Technology Company Has an Expected Return

question 28

Multiple Choice

The stock of a technology company has an expected return of 15% and a standard deviation of 20% The stock of a pharmaceutical company has an expected return of 13% and a standard deviation of 18%.A portfolio consisting of 50% invested in each stock will have an expected return of 14 % and a standard deviation

• A)less than the average of 20% and 18%.
• B)the average of 20% and 18%.
• C)greater than the average of 20% and 18%.
• D)the answer cannot be determined with the information given.

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Definitions:

Likert Scale

A technique for measuring attitudes that asks a respondent to indicate the extent to which he or she agrees with each of a series of statements about an object.

Reliability

The degree to which a measuring instrument produces the same results each time it is employed under a set of specified conditions.

Different Participants

Refers to the diverse members or individuals who take part in a study, survey, or any given activity or process.

Diary Research

A qualitative research method that involves participants keeping a record of their activities, thoughts, or feelings over a period of time for later analysis by researchers.