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Question 19 Assume the standard deviation of stock A is 20% and the standard deviation of...

Question 19

Assume the standard deviation of stock A is 20% and the standard deviation of stock B is 50%. You have bought $10,000 worth of stock A and $30,000 worth of stock B. If the correlation coefficient between the two stocks is -0.30 (negative!), what is the standard deviation of this two-stock portfolio?

a) 34.8%

b) 35.8%

c) 36.3%

d) 37.1%

e) 37.5%
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