Question
Consider the following information: State of Economy Probability of State Stock A Return Stock B Return Low 0.1 0.1 -0.2 High 0.2 0.7 0.8 Medium
Consider the following information:
| State of Economy | Probability of State | Stock A Return | Stock B Return |
| Low | 0.1 | 0.1 | -0.2 |
| High | 0.2 | 0.7 | 0.8 |
| Medium | 0.7 | 0.4 | -0.5 |
Your portfolio is invested 20 percent in Stock A and 80 percent in Stock B (WA=20% and WB=80%)
What is the standard deviation of this portfolio? (Answer is rounded)
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Public Finance
Authors: Charles Francis Bastable
1st Edition
1375520083, 978-1375520089
