Stocks a and B Each Have an Expected Return of 15%,a

question 95

Multiple Choice

Stocks A and B each have an expected return of 15%,a standard deviation of 20%,and a beta of 1.2.The returns on the two stocks have a correlation coefficient of +0.6.You have a portfolio that consists of 50% A and 50% B.Which of the following statements is CORRECT?

• A) The portfolio's beta is less than 1.2.
• B) The portfolio's expected return is 15%.
• C) The portfolio's standard deviation is greater than 20%.
• D) The portfolio's beta is greater than 1.2.
• E) The portfolio's standard deviation is 20%.

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Definitions:

Psychodynamic Model

A psychological theory that focuses on the meticulous examination of the psychological factors behind human behavior, emotions, and feelings, and their connection to experiences from early life.

Unconscious Level

A level of mental activity that occurs without conscious awareness, governing feelings, thoughts, and desires that influence behavior even though they are not accessible to the conscious mind.

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Human Fulfillment

The achievement of life goals and satisfaction across various dimensions of human life, including personal, social, and professional areas.