Question
1. A stock fund has a standard deviation of 20 percent and a bond fund has a standard deviation of 12 percent. The correlation of
1. A stock fund has a standard deviation of 20 percent and a bond fund has a standard deviation of 12 percent. The correlation of the two funds is .15. The minimum variance portfolio has approximately _____ percent invested in the stock fund and _____ percent invested in the bond fund
| a. stock =77% b. bond =23% | ||
| c. stock =23% d. bond =77% | ||
| e. cannot be determined with the given info | ||
| f. | none of the above |
2. Which of the following is the best for diversification purposes? Investing in two assets with.....
| a. | zero correlation | |
| b. | perfect positive correlation | |
| c. | perfect negative correlation | |
| d. | none |
ANSWER BOTH and show work
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Canadian Multinationals And International Finance
Authors: Gregory P. Marchildon, Duncan McDowall
1st Edition
0714634816, 978-0714634814
