Question

What is the standard deviation of the returns on a portfolio that is invested 37 percent in Stock Q and 63 percent in Stock R?


State of Economy Probability of State of Economy Rate of Return if State Occurs
Stock Q Stock R
Boom .15 .16 .15
Normal .85 .09 .13

A) 1.37 percent

B) 2.47 percent

C) 1.63 percent

D) 1.28 percent

E) 2.09 percent

Answer

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