A stock portfolio consists of two stocks X and Y.Their daily closing prices are independent random variables with standard deviations σX = 2.51 and σY = 5.22.What is the standard deviation of the sum of the closing prices of these two stocks?
A)33.55
B)6.48
C)7.73
D)5.79

Question

Quizplus · Accepted Answer

The standard deviation of the sum of two independent random variables is the square root of the sum of their variances: √(σX² + σY²) = √(2.51² + 5.22²) = 5.79.

A Stock Portfolio Consists of Two Stocks X and Y