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9 July, 22:46

Your client, Bo Regard, holds a complete portfolio that consists of a portfolio of risky assets (P) and T-Bills. The information below refers to these assets. E (Rp) 12.00 % Standard Deviation of P 7.20 % T-Bill rate 3.60 % Proportion of Complete Portfolio in P 80 % Proportion of Complete Portfolio in T-Bills 20 % Composition of P: Stock A 40.00 % Stock B 25.00 % Stock C 35.00 % Total 100.00 % What is the standard deviation of Bo's complete portfolio?

A. 10.32%

B. 5.28%

C. 9.62%

D. 8.44%

E. 7.58%

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  1. 9 July, 23:46
    0
    The correct answer is 5.76%

    Explanation:

    Std. Dev. of C = (80/100) * 7.20% + (20/100) * 0%

    Std. Dev. of C = (80/100) * 7.20%

    Std. Dev. of C =.8 * 7.20% = 5.76%.
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