A U.S. investor is considering a portfolio consisting of 50% invested in the U.S. equity index fund, 40% invested in the British equity index fund, and 10% invested in the German equity index. The expected returns for the funds are 10% for the U.S., 15% for the Germans and 8% for the British.

What is the standard deviation of the proposed portfolio?

Question answer options:

(a) 3% (b) 2% (c) 4% (d) 5%