A Stock Portfolio Consists of Two Stocks X and Y

question 26

Multiple Choice

A stock portfolio consists of two stocks X and Y. Their daily closing prices are correlated random variables with variances σ_X² = 3.51 and σ_Y² = 5.22, and covariance σ_XY = -1.55. What is the standard deviation of the sum of the closing prices of these two stocks?

• A)5.63
• B)7.18
• C)8.73
• D)2.68

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