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You have the following information: Economy State Probability Stock A Stock B Stock C Good .4 14% 10% 22% Neutral .23 0% 1% 14% Bad
You have the following information:
Economy State Probability Stock A Stock B Stock C Good .4 14% 10% 22% Neutral .23 0% 1% 14% Bad .37 -3% -9% -34%
Suppose the risk-free rate is 3%. You own a portfolio with 50% of your money in the risk-free asset, 20% in Stock A, and 30% in Stock B. Calculate the standard deviation of your portfolio. (Hint: round variance and standard deviation to six places after decimal)
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