Next Page Page 25 of 3 Question 25 (3.3 points) There are two stocks (stock 1 and stock 2) in a portfolio and two possible states of economy (good and bad) that may occur. The return of stock 1 (2) is 9% (12%) in the good state that has a probability of 60%. The return of stock 1 (2) is -2% (-4%) in the bad state that has a probability of 40%. The portfolio allocates $3,000 to stock 1 and $7,000 to stock 2 (the given information is the same as in the previous question). What is the return standard deviation of stock 1? OA A) 2.90% B) 7.84% C) 5.39% D) 6.14% Page 25 of 30 Next Page Previous Page 2