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Consider the following probability distribution for stocks A and B: Return on Return on State Probability Stock A Stock B 1 0.10 10 % 8
Consider the following probability distribution for stocks A and B: Return on Return on State Probability Stock A Stock B 1 0.10 10 % 8 % 2 0.20 13 % 7 % 3 0.20 12 % 6% 0.30 14 % 9% 5 0.20 15 % 8 % If you invest 40% of your money in A and 60% in B, what would be your portfolio's expected rate of return and standard deviation? A) 9.9%; 3% B) 9.9%; 1.1% C) 11%; 1.1% D) 11%; 3% 4
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