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Stock a Has a Standard Deviation of 25% Per Year

Question 64

Multiple Choice

Stock A has a standard deviation of 25% per year and Stock B has a standard deviation of 20% per year. The correlation between Stock A and Stock B is .30. You have a portfolio of these two stocks wherein Stock B has a portfolio weight of 40%. What is your portfolio variance?


A) .03022
B) .03156
C) .03239
D) .03610
E) .03304

Correct Answer:

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