USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Stocks A and B have a correlation coefficient of -0.8. The stocks' expected returns and standard deviations are in the table below. A portfolio consisting of 40% of stock A and 60% of stock B is constructed.

-Refer to Exhibit 6.14. What is the standard deviation of the stock A and B portfolio?
A) 0.0%
B) 0.5%
C) 4.1%
D) 6.9%
E) 20.3%

Question

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Stocks A and B have a correlation coefficient of -0.8. The stocks' expected returns and standard deviations are in the table below. A portfolio consisting of 40% of stock A and 60% of stock B is constructed.
 
-Refer to Exhibit 6.14. What is the standard deviation of the stock A and B portfolio?
A) 0.0% 
B) 0.5% 
C) 4.1% 
D) 6.9% 
E) 20.3%

Quizplus · Accepted Answer

The Answer of USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Stocks A and B have a correlation coefficient of -0.8. The stocks' expected returns and standard deviations are in the table below. A portfolio consisting of 40% of stock A and 60% of stock B is constructed.
 
-Refer to Exhibit 6.14. What is the standard deviation of the stock A and B portfolio?
A) 0.0% 
B) 0.5% 
C) 4.1% 
D) 6.9% 
E) 20.3%