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CFA Level 1
Portfolio Management

Calculating Portfolio Total Risk

Hard Portfolio Risk And Return Risk Measures

Consider a portfolio comprised of 80% in equities and 20% in bonds. An analyst is examining the portfolio's risk profile. The standard deviation of the equity component is 15%, while the bond component has a standard deviation of 5%. The correlation between the returns of equities and bonds is 0.3.

Using the given data, which of the following measures accurately represents the portfolio's total risk (standard deviation)?

Hint

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