The Expected Return on VZ Next Year Is 12% with a Standard

question 78

Multiple Choice

The expected return on VZ next year is 12% with a standard deviation of 20%.The expected return on ANT next year is 24% with a standard deviation of 30%.The correlation between the two shares is .6.If Arya makes equal investments in VZ and ANT, what is the standard deviation of her portfolio?

• A)22.47%
• B)25.00%
• C)5.05%
• D)15.00%

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Definitions:

Sales Revenue

The income received by a company from its sales of goods or services, before any expenses are deducted.

Unit Selling Price

The price levied for an individual unit of a product or service.

Break-even Analysis

A financial calculation to determine the sales volume at which a business neither makes a profit nor a loss.

Cost-volume-profit Analysis

An accounting method used to determine how changes in costs and volume affect a company's operating income and net income.