Suppose you invest 70% of your fund in stock A and the other 30% in stock B. If stock A and B are expected to have the following returns next year, then what are the standard deviations for Stock A, Stock B and the portfolio returns respectively?

State of Economy Probability Stock A Stock B

Recession .2 -9% 1%

Boom .8 18% 3%

Question 26 options: 12.4%; 16.0%; 14.2% 5.2%; 18%; 11.6% 6.5%; 21.6%; 14.05% 10.8%; 0.8%; 7.8%