Consider the following probability distribution for stocks C and D: $$\begin{array} { c c c c }
\text { State } & \text { Probability } & \text { Return on Stock C } & \text { Return on Stock D } \
1 & 0.30 & 7 \% & - 9 \% \
2 & 0.50 & 11 \% & 14 \% \
3 & 0.20 & - 16 \% & 26 \% \
\hline
\end{array}$$ If you invest 25% of your money in C and 75% in D, what would be your portfolio's expected rate of return and standard deviation?
A) 9.891%; 8.70%
B) 9.945%; 11.12%
C) 8.225%; 8.70%
D) 10.275%; 11.12%

Question

Consider the following probability distribution for stocks C and D: $$\begin{array} { c c c c } 
\text { State } & \text { Probability } & \text { Return on Stock C } & \text { Return on Stock D } \
1 & 0.30 & 7 \% & - 9 \% \
2 & 0.50 & 11 \% & 14 \% \
3 & 0.20 & - 16 \% & 26 \% \
\hline
\end{array}$$ If you invest 25% of your money in C and 75% in D, what would be your portfolio's expected rate of return and standard deviation?
A) 9.891%; 8.70%
B) 9.945%; 11.12%
C) 8.225%; 8.70%
D) 10.275%; 11.12%

Quizplus · Accepted Answer

The Answer of Consider the following probability distribution for stocks C and D: $$\begin{array} { c c c c } 
\text { State } & \text { Probability } & \text { Return on Stock C } & \text { Return on Stock D } \
1 & 0.30 & 7 \% & - 9 \% \
2 & 0.50 & 11 \% & 14 \% \
3 & 0.20 & - 16 \% & 26 \% \
\hline
\end{array}$$ If you invest 25% of your money in C and 75% in D, what would be your portfolio's expected rate of return and standard deviation?
A) 9.891%; 8.70%
B) 9.945%; 11.12%
C) 8.225%; 8.70%
D) 10.275%; 11.12%

Consider the Following Probability Distribution for Stocks C and D