Consider a portfolio that consists of an equal investment in 20 firms.For each of these firms,there is a 70% probability that the firms will have a 16% return and a 30% that they will have a - 8% return.Each of these firms returns are independent of each other.The standard deviation of this portfolio is closest to:

Question

Quizplus · Accepted Answer

A) E[return] = (.70)(16%) + (.30)(-8%) = 8.8% 11ea7e54_8c35_a597_ba34_c13d72098569_TB1620_00 11ea7e54_8c35_a598_ba34_3f388099c023_TB1620_00

Consider a Portfolio That Consists of an Equal Investment in 20