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What is the standard deviation of the returns on a $30,000 portfolio that consists of Stocks S and T? Stock S is valued at $18,000.

What is the standard deviation of the returns on a $30,000 portfolio that consists of Stocks S and T? Stock S is valued at $18,000.

State of Economy Probability of State of Economy Rate of Return if State Occurs
Stock S Stock T
Boom .05 .11 .09
Normal .85 .08 .07
Bust .10 .05 .04
A)

2.07 percent

B)

3.36 percent

C)

2.49 percent

D)

3.63 percent

E)

2.80 percent

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