Your portfolio has a standard deviation of 16.6%. What is the 2-year standard deviation?
A)14.87%
B)15.83%
C)16.55%
D)23.48%
E)24.15%

Question

Quizplus · Accepted Answer

The 2-year standard deviation can be found by multiplying the standard deviation of the portfolio by the square root of 2 (as the standard deviation is an annual figure and we need to find it for 2 years):

2-year standard deviation = 16.6% * sqrt(2) = 23.48%

The closest answer choice is D, which is 23.48%.

Your Portfolio Has a Standard Deviation of 16