Consider a portfolio with two securities that is invested 40…

Consider a portfolio with two securities that is invested 40 percent in ABC and 60 percent in DEF. The stocks’ returns have a covariance of 0.0010. ABC’s stock has an expected return of 23.0 percent and a standard deviation of 22.0 percent. DEF’s stock has an expected return of 29.0 percent and a standard deviation of 31.5 percent. What is the variance of the return of the portfolio?

Challenging Which of the following is true of the total risk…

Challenging Which of the following is true of the total risk or standard deviation of a portfolio? (Note: “risk” is defined as total risk or standard deviation throughout) It can be greater than risk of the riskiest constituent stock It is always less than the risk of the least risky constituent stock It may be zero. It may be equal to the average of the risk of the constituent stocks

Please work ONE problem per sheet of paper. You must show yo…

Please work ONE problem per sheet of paper. You must show your desk during the entire test! (This also helps Honorlock from pausing your test due to face visibility.) I am including a basic calculator in the Tools portion of Honorlock so you do not have to worry about basic calculations. This is the only calculator you are allowed to use on this test. Show ALL your work. Answers with no work will receive no credit. No formula sheets of any kind allowed. Failure to follow the Honor Code will result in a violation. When you have completed the test, you will submit a scanned .pdf document with ALL pages in one document, in order, within 15 minutes after you exit Honorlock in the Test 3 Module in the Test 3 Submission page.