1. What is the portfolios expected return?
2. What is the variance of the portfolio and standard deviation?
3. If you have to choose only one type of securities (stock A, B, C or D) which one will you choose and why? To answer this question, you need to calculate the expected return for each stock and the standard deviation, and compare their values.

A B D E F G H J 2. ty of Stock 1 Question 2 2 State of Probabili 3 Economy 4 Boom 20% 5 Good 40% 6 Poor 20% 7 Bust 20% Rate of Return Stock A Stock B Stock C Stock D -15% 25% 33% -20% -5% 12% 15% -5% 15% -7% -5% 12% 31% -12% -9% 34% Dollar invested 30,000 45,000 B C D 25,000 00 9 10 11