Multiple Choice
The expected returns for Bumpy Inc.and Bouncy Inc.are 20.0% and 8.0%, respectively.The standard deviation is 35.0% for Bumpy and 16.0% for Bouncy.What is the portfolio standard deviation if 45.0% of the portfolio is in Bumpy and the two securities have perfect negative correlation?
A) 4.60%
B) 6.95%
C) 0.21%
D) 0.48%
Correct Answer:
Verified
Correct Answer:
Verified
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