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Suppose an investor creates a two stock portfolio combined of stock X and Y. Specifically, she puts $10,000 into Stock X and $10,000 into Stock
Suppose an investor creates a two stock portfolio combined of stock X and Y. Specifically, she puts $10,000 into Stock X and $10,000 into Stock Y. Calculate the expected return and standard deviation on this 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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