Consider the following probability distribution for stocks A and B: $\begin{array}{cccc}
\text { State } & \text { Probability } & \text { Return on Stock A}&\text {Return on Stock B } \
1 & 0.10 & 10 \% & 8 \% \
2 & 0.20 & 13\% & 7\% \
3 & 0.20 & 12\% & 6\% \
4 & 0.30 & 14\% & 9\% \
5 & 0.20 & 15\% & 8 \%
\end{array}$
If you invest 40% of your money in A and 60% in B, what would be your portfolio's expected rate of return and standard deviation?
A) 9.9%; 3%
B) 9.9%; 1.1%
C) 11%; 1.1%
D) 11%; 3%
E) None of the options are correct.

Question

Consider the following probability distribution for stocks A and B: $\begin{array}{cccc}
\text { State } & \text { Probability } & \text { Return on Stock A}&\text {Return on Stock B } \
1 & 0.10 & 10 \% & 8 \% \
2 & 0.20 & 13\% & 7\% \
3 & 0.20 & 12\% & 6\% \
4 & 0.30 & 14\% & 9\% \
5 & 0.20 & 15\% & 8 \%
\end{array}$
 If you invest 40% of your money in A and 60% in B, what would be your portfolio's expected rate of return and standard deviation?
A) 9.9%; 3%
B) 9.9%; 1.1%
C) 11%; 1.1%
D) 11%; 3%
E) None of the options are correct.

Quizplus · Accepted Answer

The Answer of Consider the following probability distribution for stocks A and B: $\begin{array}{cccc}
\text { State } & \text { Probability } & \text { Return on Stock A}&\text {Return on Stock B } \
1 & 0.10 & 10 \% & 8 \% \
2 & 0.20 & 13\% & 7\% \
3 & 0.20 & 12\% & 6\% \
4 & 0.30 & 14\% & 9\% \
5 & 0.20 & 15\% & 8 \%
\end{array}$
 If you invest 40% of your money in A and 60% in B, what would be your portfolio's expected rate of return and standard deviation?
A) 9.9%; 3%
B) 9.9%; 1.1%
C) 11%; 1.1%
D) 11%; 3%
E) None of the options are correct.

Consider the Following Probability Distribution for Stocks a and B