Stocks a and B Each Have an Expected Return of 12%,a

question 147

Multiple Choice

Stocks A and B each have an expected return of 12%,a beta of 1.2,and a standard deviation of 25%.The returns on the two stocks have a correlation of +0.6.Portfolio P has 50% in Stock A and 50% in Stock B.Which of the following statements is CORRECT?

• A) Portfolio P has a beta that is greater than 1.2.
• B) Portfolio P has a standard deviation that is greater than 25%.
• C) Portfolio P has an expected return that is less than 12%.
• D) Portfolio P has a standard deviation that is less than 25%.
• E) Portfolio P has a beta that is less than 1.2.

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Definitions:

Nonverbal Behaviors

Communication without words, including gestures, facial expressions, and body language.

Psychoeducational Session

An educational session that focuses on teaching individuals about their psychological condition, including strategies for managing symptoms and improving well-being.

Culturally Diverse

Referring to the inclusion and interaction of individuals from various ethnic, racial, and cultural backgrounds.

Medication Management

The monitoring and guidance provided to ensure that a patient uses prescription drugs correctly and effectively.