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

question 80

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 a standard deviation that is less than 25%.
• D)Portfolio P has a beta that is less than 1.2.

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Definitions:

Birth Injury

Physical damage to a baby that occurs during the birth process, ranging from minor to severe.

Genetic Defect

An abnormality in an individual's DNA that can lead to diseases or conditions that are inherited or occur spontaneously.

Peripheral Intravenous Infusion

The technique of administering fluids or medications directly into the bloodstream through a small catheter inserted into a peripheral vein.

Infiltration

The process by which a substance, like a fluid, permeates or passes into a tissue, often used in the context of liquids entering tissues during medical procedures.