Which of the following is not required to compute the standard deviation of a tw

Question

Which of the following is not required to compute the standard deviation of a two-stock portfolio? Answer

the variance in returns on each stock
the amount invested in each stock
the correlation between the returns on each stock
the expected return on a risk-free asset

The total risk of a well-diversified international portfolio of stocks appears to be about what proportion of the risk of an average one-stock portfolio? Answer
one-third
one-half
two-thirds
three-fourths
If the _____________ of a stock is known, an investor can use the security market line to determine the expected return on that stock. Answer
standard deviation
beta
coefficient of variation
unsystematic risk

Explanation / Answer

Which of the following is not required to compute the standard deviation of a two-stock portfolio?

the expected return on a risk-free asset

The total risk of a well-diversified international portfolio of stocks appears to be about what proportion of the risk of an average one-stock portfolio?

One-Third

If the _____________ of a stock is known, an investor can use the security market line to determine the expected return on that stock. Answer

Beta

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