State of Economy Boom Bust Asset Weights 8.33% 18.03% Probability of State of Economy 45% 13.96% 55% Rate of Return if State Occurs Stock A 0.18 What is the standard deviation of the portfolio? -0.06 50% Cannot be determined from given information. Stock B 0.40 -0.30 25% Stock C 0.22 -0.05 25%

Rate of Return if State Occurs What is the standard deviation of the portfolio? 8.33% 18.03% Cannot be determined from given information 13.96%