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The following returns have been estimated for Security B and Security O: Scenario Security B Security O 1 10% 0% 2 -3% 5% 3 14%
The following returns have been estimated for Security B and Security O:
Scenario | Security B | Security O |
1 | 10% | 0% |
2 | -3% | 5% |
3 | 14% | 10% |
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|
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Each scenario is equally likely to occur, and you plan to invest 40% of your funds in Security B and 60% in Security O. What is the standard deviation of the rate of return of your portfolio? Round your answer to the nearest tenth of a percent.
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