Q. 3. Set (A) [10 Marks]

The stock of Bindra Ltd. Performs well relative to other stocks during recessionary period. The stock of Cinox Ltd., on the other hand, does well during growth periods. Both the stocks are currently selling for Rs.100 per share. You assess the rupee return (dividend plus price) of these stocks for the next year as follows.

	Economic Condition
	High growth	Low growth	Stagnation	Recession
Probability	0.3	0.4	0.2	0.1
Return on Bindras stock	100	110	120	140
Return on Cinoxs stock	150	130	90	60

Calculate the expected return and standard deviation of investing.

1. Rs.1000 in the equity stock of Bindra Ltd. [ 3 Marks]
2. Rs.1000 in the equity stock of Cinox Ltd. [ 3 Marks]

Rs.500 each in the equity stock of Bindra Ltd. and Cinox Ltd