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AAFM Exam GLO_CWM_LVL_1 Topic 4 Question 95 Discussion

Actual exam question for AAFM's GLO_CWM_LVL_1 exam
Question #: 95
Topic #: 4
[All GLO_CWM_LVL_1 Questions]

Given the following information:

What is the expected return and standard deviation of the portfolio if 50% of funds invested in each stock? What would be the impact if the correlation coefficient were 0.6 instead of 0.2?

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Suggested Answer: C

by Jodi at Nov 16, 2024, 09:50 AM

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Kayleigh
3 days ago
Wait, did they just ask us to calculate the impact of correlation on a portfolio? Sounds like someone's been watching too many finance documentaries on Netflix.
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Elenora
5 days ago
But what about the impact of the correlation coefficient? Would it really make a big difference?
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Annmarie
6 days ago
I agree with Adrianna, option B seems to be the most reasonable choice.
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Aileen
7 days ago
High risk, high reward! 19% return and 0.429 standard deviation? Sign me up, I'm feeling lucky today!
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Adrianna
11 days ago
I think the expected return would be 16% with option B.
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Evangelina
16 days ago
Ah, the sweet spot! 16% return and 0.314 standard deviation. Now that's what I call a well-balanced portfolio.
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Azzie
22 hours ago
User 2: Definitely, it's the sweet spot for a well-balanced portfolio.
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Ressie
3 days ago
User 1: I agree, a 16% return and 0.314 standard deviation is ideal.
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Michael
18 days ago
I'm more of a conservative investor, so I'd go with option B - 16% return and 0.398 standard deviation. Seems like a safer bet.
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Micheline
19 days ago
Hmm, let's see... 18% return and 0.456 standard deviation? Sounds like a pretty risky investment to me.
upvoted 0 times
Latricia
4 days ago
I agree, that does seem like a high standard deviation.
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