1. Mr. Jones has a 2-stock portfolio with a total value of $560,000. $195,000 is invested in Stock A and the remainder is invested in Stock B. If standard deviation of Stock A is 19.30%, Stock B is 9.75%, and correlation between Stock A and Stock B is 0.40, what would be the expected risk on Mr. Jones’ portfolio (standard deviation of the portfolio return)?
A. 10.94%
B. 8.86%
C. 13.02%
D. 10.83%
E. 11.16%
2. Mrs. Landis has a 2-stock portfolio with a total value of $500,000. $175,000 is invested in Stock A with a beta of 1.55 and the remainder is invested in Stock B with a beta of 0.95. What is her portfolio's beta?
A. 1.21
B. 0.97
C. 1.01
D. 1.16
E. 1.42