Consider the following probability distribution for stocks A and B: $$\begin{array} { c c c c }
\text { State } & \text { Probability } & \text { Return on Stock A } & \text { Return on Stock B } \
1 & 0.10 & 10 \% & 8 \% \
2 & 0.20 & 13 \% & 7 \% \
3 & 0.20 & 12 \% & 6 \% \
4 & 0.30 & 14 \% & 9 \% \
5&0.20 & 15 \% & 8 \%
\end{array}$$
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 these

Question

Consider the following probability distribution for stocks A and B: $$\begin{array} { c c c c } 
\text { State } & \text { Probability } & \text { Return on Stock A } & \text { Return on Stock B } \
1 & 0.10 & 10 \% & 8 \% \
2 & 0.20 & 13 \% & 7 \% \
3 & 0.20 & 12 \% & 6 \% \
4 & 0.30 & 14 \% & 9 \% \
5&0.20 & 15 \% & 8 \%
\end{array}$$
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 these

Quizplus · Accepted Answer

The Answer of Consider the following probability distribution for stocks A and B: $$\begin{array} { c c c c } 
\text { State } & \text { Probability } & \text { Return on Stock A } & \text { Return on Stock B } \
1 & 0.10 & 10 \% & 8 \% \
2 & 0.20 & 13 \% & 7 \% \
3 & 0.20 & 12 \% & 6 \% \
4 & 0.30 & 14 \% & 9 \% \
5&0.20 & 15 \% & 8 \%
\end{array}$$
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 these

Consider the Following Probability Distribution for Stocks a and B