The correct answer is C.

To find the dollar volatility of the portfolio, we use the formula:

Dollar volatility = $\sqrt{\sigma_p^2 W^2} = \sqrt{X' \Sigma X}$

$\Sigma x = \begin{bmatrix} 0.06^2 & 0 \\ 0 & 0.1^2 \end{bmatrix} \begin{bmatrix} 2.5 \\ 1 \end{bmatrix} = \begin{bmatrix} 0.06^2 \times 2.5 + 0 \times 1 \\ 0 \times 2.5 + 0.1^2 \times 1 \end{bmatrix} = \begin{bmatrix} 0.009 \\ 0.01 \end{bmatrix}$

X' \Sigma x = \begin{bmatrix} \`2.5 & \1` \end{bmatrix} \begin{bmatrix} 0.009 \\ 0.01 \end{bmatrix} = \`0.03`25 \text{ million}$

Dollar volatility = \sqrt{0.0325} = \`0.18`03 \text{ million}$