Which of the following is not required to compute the standard deviation of a two-stock portfolio? Formula is not in the chapter
A)the variance in returns on each stock
B)the amount invested in each stock
C)the correlation between the returns on each stock
D)the expected return on a risk-free asset

Question

Quizplus · Accepted Answer

The expected return on a risk-free asset is not needed to compute the standard deviation of a two-stock portfolio. The other three listed factors (variance in returns on each stock, amount invested in each stock, correlation between returns on each stock) are all necessary inputs for calculating the standard deviation.

Which of the Following Is Not Required to Compute the Standard