Consider the following information

State Probability K L

Boom $0\mathrm{.}3518\%10\%$

Normal $0\mathrm{.}559\%8\%$

Recession $0\mathrm{.}105\%3\%$

What is the expected return and standard deviation for a portfolio with an investment of $$3500$ in K and $$6500$ in L$?$ If the S&P TSX index produce $5\mathrm{.}44\%$ did this portfolio outperform or underperform the market index?

Question $1$ options:

Expected return $=9\mathrm{.}44,$ Variance $=7\mathrm{.}89$ and standard deviation $=2\mathrm{.}8089.$ the portfolio outperforms the market index.

Expected return $=9\mathrm{.}95,$ Variance $=11\mathrm{.}25$ and standard deviation $=3\mathrm{.}3541.$ the portfolio outperforms the market index

Expected return $=5\mathrm{.}66,$ Variance $=10\mathrm{.}50$ and standard deviation $=10\mathrm{.}2470.$ the portfolio outperforms the market index.

Expected return $=6\mathrm{.}77,$ Variance $=8\mathrm{.}89$ and standard deviation$=2\mathrm{.}98.$ the portfolio outperforms the market index.