Question
Your portfolio consists of $50,000 invested in Stock X and $50,000 invested in Stock Y. Both stocks have an expected return of 15%, betas of
Your portfolio consists of $50,000 invested in Stock X and $50,000 invested in Stock Y. Both stocks have an expected return of 15%, betas of 1.6, and standard deviations of 30%. The returns of the two stocks are independent, so the correlation coefficient between them, r XY, is zero. Which of the following statements best describes the characteristics of your 2-stock portfolio?
| Your portfolio has a standard deviation of 30%, and its expected return is 15%. | ||
| Your portfolio has a standard deviation less than 30%, and its beta is greater than 1.6. | ||
| Your portfolio has a beta equal to 1.6, and its expected return is 15%. | ||
| Your portfolio has a beta greater than 1.6, and its expected return is greater than 15%. | ||
| Your portfolio has a standard deviation greater than 30% and a beta equal to 1.6. |
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Handbook On Corporate Governance In Financial Institutions
Authors: Christine A. Mallin
1st Edition
1784711780, 978-1784711788
