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What Is the Standard Deviation of a Portfolio Which Is \quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad

Question 98

Multiple Choice

What is the standard deviation of a portfolio which is comprised of €4,500 invested in share S and €3,000 in share T?
\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad Returns if
\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad State Occurs
 State of Economy  Probability of State of Economy  ShareS  Share T  Boom 10%12%4% Normal 65%9%6% Recession 25%2%9%\begin{array}{|l|l|l|l|}\hline \text { State of Economy } & \text { Probability of State of Economy } & \text { ShareS } & \text { Share T } \\\hline \text { Boom } & 10 \% & 12 \% & 4 \% \\\hline \text { Normal } & 65 \% & 9 \% & 6 \% \\\hline \text { Recession } & 25 \% & 2 \% & 9 \% \\\hline\end{array}


A) 1.4%
B) 1.9%
C) 2.6%
D) 5.7%
E) 7.2%

Correct Answer:

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