You are considering investing \($1000\) into one or possibly two different investment funds. Historically, each has delivered 5% a year in profit with a standard deviation of 3%. So, a \($1000\) investment would produce \($50\) with a standard deviation of \($30\).

QUESTION:

Assuming the two funds are independent, what are the relative advantages and disadvantages of putting \($1000\) into one, or splitting the \($1000\) and putting \($500\) into each? Compare the means and SDs of the profit from the two strategies.