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You are considering the formation of a portfolio with equal investment in the following three stocks. What is the standard deviation of this portolfio? Enter
You are considering the formation of a portfolio with equal investment in the following three stocks. What is the standard deviation of this portolfio? Enter your answer as a percentage accurate to two decimal points).
State | Prob | Stock A | Stock B | Stock C |
Good | 0.2 | 15% | 7% | -10% |
Normal | 0.6 | 8% | 8% | 7% |
Bad | 0.2 | -4% | 10% | 25% |
You are considering the same three stocks from the previous question. Now, you wish to put 50% of your money in A and the rest equally distributed between B and C. What is the new standard deviation of the portfolio? (Enter your answer as a percentage accurate to two decimal places.)
State | Prob | Stock A | Stock B | Stock C |
Good | 0.2 | 15% | 7% | -10% |
Normal | 0.6 | 8% | 8% | 7% |
Bad | 0.2 | -4% | 10% | 25% |
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