The Standard Deviation of Returns on Warchester Shares Is 20

question 67

True/False

The standard deviation of returns on Warchester shares is 20% and on Shoesbury shares it is 16%.The coefficient of correlation between the shares is .75.The standard deviation of any portfolio combining the two shares will be less than 20%.

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Definitions:

Avoidance

A behavioral response aimed at escaping or evading a perceived unpleasant, painful, or threatening situation, object, or subject.

Conservation

In environmental terms, it refers to the protection, preservation, management, or restoration of natural environments and the ecological communities that inhabit them.

Basic Trust

A foundational sense of confidence in the reliability and predictability of the world, often developed in infancy.

Temperament

Temperament refers to the inherent aspects of an individual's personality, including their tendency towards particular emotional responses and behaviors.