Your portfolio invests in the stock of two companies. Company​ A’s stock has a variance of​ 0.25, while Company​ B’s stock has a standard deviation of 0.30. The correlation between the two stocks is 0.40. If​ 30% of your portfolio is invested in Company​ A, and​ 70% in Company​ B, what is the standard deviation of your​ portfolio?   A. ​28.74%   B. ​24.96%   C. ​30.30%   D. ​28.50%

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Your portfolio invests in the stock of two companies. Company​ A’s stock has a variance of​ 0.25, while Company​ B’s stock has a standard deviation of 0.30. The correlation between the two stocks is 0.40. If​ 30% of your portfolio is invested in Company​ A, and​ 70% in Company​ B, what is the standard deviation of your​ portfolio?

 
A. ​28.74%
 
B. ​24.96%
 
C. ​30.30%
 
D. ​28.50%
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