Assume That Your Uncle Holds Just One Stock, East Coast

Multiple Choice

Assume that your uncle holds just one stock, East Coast Bank Both banks have had less variability than most other stocks over the past 5 years.Measured by the standard deviation of returns, by how much would your uncle's risk have been reduced if he had held a portfolio consisting of 60% in ECB and the remainder in WCB? (Hint: Use the sample standard deviation formula.)

A) 3.29%
B) 3.46%
C) 3.65%
D) 3.84%
E) 4.03%