Consider the following probability distribution for stocks C and D: State Probability Return on Stock C...

Consider the following probability distribution for stocks C and D:

State	Probability		Return on Stock C			Return on Stock D
1		0.30		7	%	–	9	%
2		0.50		11	%		14	%
3		0.20	–	16	%		26	%

If you invest 25% of your money in C and 75% in D, what would be your portfolio's expected rate of return and standard deviation?

Select one:

a. 9.891%; 8.70%

b. 9.945%; 11.12%

c. 8.225%; 8.70%

d. 10.275%; 11.12%

Solutions

Expert Solution

jeff jeffy answered 1 year ago

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