PRMIA Exam I: Finance Theory Financial Instruments Financial Markets - 2015 Edition 8006 Question # 33 Topic 4 Discussion

PRMIA Exam I: Finance Theory Financial Instruments Financial Markets - 2015 Edition 8006 Question # 33 Topic 4 Discussion

8006 Exam Topic 4 Question 33 Discussion:
Question #: 33
Topic #: 4

What is the standard deviation (in dollars) of a portfolio worth $10,000, of which $4,000 is invested in Stock A, with an expected return of 10% and standard deviation of 20%; and the rest in Stock B, with an expected return of 12% and a standard deviation of 25%. The correlation between the two stocks is 0.6.


A.

$2,081


B.

$1,201


C.

$1,204


D.

$4,330,000


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