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Question
A bank is considering adding security brokerage services to the services it offers. It has estimated that the expected return and standard deviation of its traditional service are 6% and 14% respectively. It has estimated that the expected return and standard deviation of its new securities brokerage services are 14% and 24% respectively. The correlation between these services has been estimated to be -.4 and the bank estimates that 60% of its business will be from traditional services and 40% from the new services. What is the standard deviation of the new combined firm?
A) 24.00%
B) 18.00%
C) 15.07%
D) 14.00%
E) 9.91%
Answer
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Related questions
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B) Cash in the vault
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Interest Income
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D) All of the above
E) None of the above
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A) Credit risk
B) Liquidity risk
C) Interest-rate risk
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B) Asset utilization.
C) Equity multiplier.
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is long-term debt capital whose claims legally follow claims of depositors.
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represents funds set aside for contingencies such as legal action against the institution as well as providing a reserve for dividends expected to be paid but not yet declared and a sinking fund to retire stock or debt in the future.