Question
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% | 0.25 | 0.18 | 0.18 |
| Good | 45% | 0.13 | 0.09 | 0.08 |
| Poor | 25% | 0.02 | 0.01 | 0.03 |
| Bust | 10% | -0.09 | -0.05 | -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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Entrepreneurial Finance
Authors: Gary E. Gibbons, Robert D. Hisrich, Carlos Marques DaSilva
1st Edition
1452274177, 978-1452274171
