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1. Consider the following probability distribution for stocks A and B: State Probability Return on Stock A 30% 10% 2 40% 15% 3 30% 18%
1. Consider the following probability distribution for stocks A and B: State Probability Return on Stock A 30% 10% 2 40% 15% 3 30% 18% Return on Stock B 11% 12% 15% 1) What are the expected rates of return of stocks A and B, respectively? 2) What are the standard deviations of stocks A and B, respectively? 3) If you invest 50% of your money in A and 50% in B, what would be your portfolio's expecte rate of return and standard deviation
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