The variance of stock a is .0105 and the variance of stock b is .0087. The correlation coefficient between them is 0.00. What comes closest to the portfolio variance of an equally weighted portfolio containing the two stocks?
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The variance of Stock A is .0105 and the variance of Stock B is .0087. The covariance between the two projects is -0.005. What comes closest to the portfolio variance of an equally weighted portfolio (50% in each stock) containing the two stocks?A. 0.0000B. 0.0023C. 0.0048D. 0.0071E. 0.00992. Suppose that the correlation coefficient between Asset X and Asset Y is 0.00, and that a two-stock portfolio is formed by combining some percentage of your money in Asset X and some percentage of your money in Asset Y. What would be true with respect to the diversification benefits of this portfolio? (This question has only 3 possible answer choices – no choice D and no choice E)A.No benefit such that portfolio risk is a weighted average of the individual risks of the two assetsB.Maximum benefit such that portfolio risk can be reduced to zeroC.Partial benefit such that some percentage of total risk gets reduced through diversificationWhat can we infer from the fact that the correlation coefficient between Project Jimmy and Project Walter was equal to -1.00?a.That there will be no diversification gain between the two projectsb.That the covariance between the two projects will be negativec.That the expected return of the two projects will be zero (or close to zero)d.That the state dependent returns must have had equal probability of occurringe.That the projects have no relationship with each other