Calculate the Risk (Standard Deviation) of the Following Two-Security Portfolio

question 28

Multiple Choice

Calculate the risk (standard deviation) of the following two-security portfolio if the correlation coefficient between the two securities is equal to 0.5. Variance Weight (in the portfolio)
$\begin{array} { l l l } \text { Variance } & & \text { Weight (in the portfolio) } \\\hline \text { Security A } & 10 & 0.3 \\\text { Security B } & 20 & 0.7\end{array}$

• A) 17.0 percent
• B) 5.4 percent
• C) 2.0 percent
• D) 3.7 percent

Identify the role of businesses in societal and environmental issues.

Comprehend the relationship between ethical business practices, profitability, and social responsibility.

Understand the impact of whistleblowing in enforcing corporate accountability.

Analyze the role of global corporations in adopting and integrating home-country and host-country standards.

---

Definitions:

Marginal Cost

The additional expense required to produce an extra item or unit of output, emphasizing its role in economic decision-making.

Fixed Cost

A cost that does not change with the amount of goods or services produced, such as rent, salaries, or loan payments.

Cartel

An agreement among competing firms to control prices or exclude entry of a new competitor in the market, often illegal or regulated by law.

Fixed Cost

A cost that does not change with an increase or decrease in the amount of goods or services produced or sold.