Question
You decide to invest in a portfolio consisting of 17 percent Stock X, 49 percent Stock Y, and the remainder in Stock Z. Based on
You decide to invest in a portfolio consisting of 17 percent Stock X, 49 percent Stock Y, and the remainder in Stock Z. Based on the following information, what is the standard deviation of your portfolio?
State of economy Probability of state of economy
Normal 0.79
Boom 0.21
Return if State Occurs
Stock X Stock Y Stock Z
11.00% 4.40% 13.40%
18.30% 26.30%. 17.80%
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
16th edition
125927716X, 978-1259687969, 1259687961, 978-1259277160
