Saul Goldman is a portfolio manager, and he decided to invest a clients portfolio into two stocks: LaserTag Inc, and CarWash Corp. He decided to invest 25% of the portfolio in LaserTag, and the remaining 75% in CarWash. The standard deviation of returns of LaserTag is 5%, and the standard deviation of CarWash returns is 3%. The two stocks have a correlation coefficient of -0.4 (note the negative sign). What is the standard deviation of the resulting portfolio?

Select one:

a. 2.57%

b. 2.09%

c. 2.98%

d. 3.48%

e. 3.50%

Clear my choice