Question 18

Use the following Information to answer Questions 18 - 19

Suppose you have $10,000 total. You invest $3,500 in Stock X and the remainder in Stock Y

State of the economy	Probability	Return on Stock X	Return on Stock Y
Recession	0.15	0.02	0.18
Normal	0.60	0.08	0.11
Boom	0.25	0.13	0.29

What will be the expected return on your portfolio?

a. 6.52%

b. 7.83%

c. 11.58%

d. 10.17%

Question 19

Suppose you have $10,000 total. You invest $3,500 in Stock X and the remainder in Stock Y

What would be the standard deviation of your portfolio?

a. 14.36%

b. 12.43%

c. 10.54%

d. 16.12%