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Consider the following information on Stocks A, B, C and their returns (in decimals) in each state: State Prob. of State A B C Boom
Consider the following information on Stocks A, B, C and their returns (in decimals) in each state:
State Prob. of State A B C
Boom 20% 0.26 0.2 0.15
Good 45% 0.14 0.09 0.09
Poor 25% 0.02 0.02 0.04
Bust 10% -0.1 -0.02 -0.02
If your portfolio is invested 25% in A, 40% in B, and 35% in C, what is the standard deviation of the portfolio in percent? Answer to two decimals, carry intermediate calcs. to at least four decimals.
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