Exam DISC-RM Practice Question 466
Study guide: Exam DISC-RM
A company's two business units have annual results with standard deviations of $5 million and $12 million, and a correlation of 0.25 between them. The board's risk tolerance for the whole company is a standard deviation of $13 million. What is the company's standard deviation, and is it within tolerance?
- A) $11.8 million, within tolerance
- B) $13.0 million, exactly at tolerance
- C) $14.1 million, above tolerance
- D) $17.0 million, above tolerance
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