Question
Consider a $20 million portfolio consisting of $12 million of Stock X and $8 million of Stock Y. Stock X has a standard deviation of
Consider a $20 million portfolio consisting of $12 million of Stock X and $8 million of Stock Y. Stock X has a standard deviation of 40% while Stock Y has a standard deviation of 60%. If the standard deviation of the portfolio is 48%, which of the following statements is true?
a. The correlation coefficient between Stock X and Stock Y is 1.0
b. The correlation coefficient between Stock X and Stock Y is less than 1.0 but greater than 0.
c. The correlation coefficient between Stock X and Stock Y is 0.6.
d. Cannot draw any inference about the correlation coefficient between Stock X and Stock Y from the above information.
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Health Care Budgeting And Financial Management
Authors: William J. Ward Jr.
2nd Edition
1440833052, 9781440833052
