1. You have one share of Sierra stock and one share of Tango stock in a portfolio. Both are equally priced. Both have an expected return of 6% and both have a standard deviation of returns of 2%. The returns of the two stocks are not perfectly correlated. Which of the following statements is true about this two-stock portfolio?
A. The portfolio expected return is not 6% and the portfolio standard deviation is 2%.
B. The portfolio expected return is not 6% and the portfolio standard deviation is not 2%.
C. Answer is not possible or not listed
D. The portfolio expected return is 6% and the portfolio standard deviation is not 2%.
E. The portfolio expected return is 6% and the portfolio standard deviation is 2%.
2. Which of the following statements is true?
A. Answer is not possible or not listed
B. Index funds usually pay higher taxes and managed funds usually have lower fees.
C. An index fund is actively managed and a managed fund usually has higher fees.
D. Index funds usually have higher fees and managed funds usually pay higher taxes.
E. Index funds usually pay lower taxes and managed funds usually have higher fees.