1. The standard deviation of stock A is .60, while the standard deviation of stock B is .80. If the correlation coefficient for A and B is positive, then a portfolio that consists of 50% of stock A and 50% of stock B MUST have a standard deviation ______ Assume no short selling allowed.

A. Less than 0.5

B. Greater than 0.7

C. Greater than 0.5

D. Less than 0.6

E. Not enough information

Ans : C