QUESTIONS 115 THROUGH 120 RELATE TO PORTFOLIO MANAGEMENT.

116. An analyst gathered the following information about a portfolio comprised of two

assets:

Asset Weight (%) Expected Return Expected Standard Deviation

X 75 11% 5%

Y 25 7% 4%

If the correlation of returns for the two assets equals 0.75, and the risk-free

interest rate 1 percent, then the expected standard deviation of the portfolio is

closest to:

A. 3.07%.

B. 4.23%.

C. 4.55%.

By accessing this mock exam, you agree to the following terms of use: This mock exam is provided to

currently-registered CFA candidates. Candidates may view and print the exam for personal exam

preparation only. The following activities are strictly prohibited and may result in disciplinary and/or legal

action: accessing or permitting access by anyone other than currently-registered CFA candidates; copying,

posting to any website, emailing, distributing and/or reprinting the mock exam for any purpose.