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5. What is the variance of the returns on a portfolio that is invested 40 percent in Stock S and 60 percent in Stock T?

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5. What is the variance of the returns on a portfolio that is invested 40 percent in Stock S and 60 percent in Stock T? State of Economy Probability of State of Economy Rate of Return if State Occurs Stocks Stock T Boom .06 .22 .18 Normal .92 .15 .14 Bust .02 .26 .09 A) .00107 B) .00091 C) .00118 D) .00136 E) .00083

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