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The possible returns for 2 stocks can be found in the following table: Probability Stock X Stock Y .25 6 7 .25 8 8 .40
The possible returns for 2 stocks can be found in the following table:
Probability | Stock X | Stock Y |
.25 | 6 | 7 |
.25 | 8 | 8 |
.40 | 10 | 9 |
.10 | 13 | 11 |
Average | 8.80 | 8.45 |
Variance | 4.46 | 1.3475 |
Calculate the standard deviation of X - Y.
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