Standard deviation of return

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1. A portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 28%, while stock B has a standard deviation of return of 22%. Stock A comprises 60% of the portfolio, while stock B comprises 40% of the portfolio. If the variance of return on the portfolio is .050, the correlation coefficient between the returns on A and B is _________ . a) .190 b) .285 c) .104 d ) .475

2. Historical returns have generally been __________ for stocks of small firms as (than) for stocks of large firms. a) higher b) none of these options (There is c) no evidence of a systematic relationship between returns on small-firm stocks and returns on large-firm stocks.) c) the same d) lower

Reference no: EM132024219

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