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Suppose an investor creates a three asset portfolio combined of stock X, stock Y, and the risk-free asset. The investor puts 60% in Stock X,

Suppose an investor creates a three asset portfolio combined of stock X, stock Y, and the risk-free asset. The investor puts 60% in Stock X, 30% in Stock Y, and 10% in the risk free rate. Calculate the standard deviation on the portfolio. (Enter percentages as decimals and round to 4 decimals)

Prob(State) X Y
Boom 50% 12% 8%
Normal 15% 6% -5%
Bust 35% -3% 3%

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