What is the standard deviation of a portfolio that is invested 40% in stock Q and 60% in stock R?

State of Probability of Returns if State Occurs

Economy State of Economy Stock Q Stock R

Boom 25% 18% 9%

Normal 75% 9% 5%

(show steps and calculations)

A. 0.7%

B. 1.4%

C. 2.6%

D. 6.8%

E. 8.1%