In Example 13.3, what are the standard deviations on the two portfolios? To answer, we first have

Question:

In Example 13.3, what are the standard deviations on the two portfolios? To answer, we first have to calculate the portfolio returns in the two states. We will work with the second portfolio, which has 50 per cent in Share A and 25 per cent in each of Shares B and C. The relevant calculations can be summarised as follows:

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