Consider a 2 asset portfolio with 60 in Google Inc (GOOG) and 40 in John Deere (DE). Google has a standard deviation of 60, John Deere has a standard deviation of 45 and their correlation is 0.2.
What is the standard deviation of returns of the portfolio?
A) 38.33
B) 43.35
C) 45.25
D) 50.00
E) 52.50
Question 2
Financial theory assumes that individuals are risk averse.
Indicate whether the statement is true or false