If the standard deviation of returns on the market is 20%,and the beta of a well-diversified portfolio is 1.5,calculate the standard deviation of this portfolio:
A)30%.
B)20%.
C)15%.
D)10%.

Question

Quizplus · Accepted Answer

The standard deviation of a portfolio with a given beta is calculated by multiplying the market's standard deviation by the portfolio's beta. Here, 20% * 1.5 = 30%.

If the Standard Deviation of Returns on the Market Is