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What are the expected return and standard deviation on a portfolio that is invested 40 percent in Stock X and 60 percent in Stock Y?
What are the expected return and standard deviation on a portfolio that is invested 40 percent in Stock X and 60 percent in Stock Y? (E(RP), SDP)
State of Economy | Probability of State of Economy | Rate of Return if State Occurs | |||||
Stock X | Stock Y | ||||||
Boom | 6% | 22% | 18% | ||||
Normal | 92% | 15% | 14% | ||||
Bust | 2% | 26% | 9% |
(14.32%, 3.02%) | ||
(14.32%, 6.03%) | ||
(14.14%, 6.03%) | ||
(14.14%, 3.02%) | ||
(14.32%, 3.13%) |
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