Question
Four securities have the characteristics described in the following table: Stock A Stock B Stock C Stock D 4% 8% 10% 6% 2.2 1.5 0.5
Four securities have the characteristics described in the following table:
| Stock A | Stock B | Stock C | Stock D |
| 4% | 8% | 10% | 6% |
| 2.2 | 1.5 | 0.5 | 0.8 |
ei | 4% | 8% | 4% | 2% |
Use the table and the Single-Index Model for problems 14-17 to calculate the requested values for an equally weighted portfolio made up of the four assets, given an expected market return of 6% (Rm = 6%) and a market risk of 4% ( m = 4%).
What is the standard deviation of the portfolio?
a. | Less than 2.5 | |
b. | Greater than or equal to 2.5 but less than 5 | |
c. | Greater than or equal to 5 but less than 7.5 | |
d. | Greater than or equal to 7.5 but less than 10 | |
e. | Greater than or equal to 10 |
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