Question

In: Finance

If you invest 40% of your money in A and 60% in B, what would be your portfolio's expected rate of return and standard deviation?

Consider the following probability distribution for stocks A and B: State Probability Return on Stock A Return on Stock B 1 0.10 10 % 8 % 2 0.20 13 % 7 % 3 0.20 12 % 6 % 4 0.30 14 % 9 % 5 0.20 15 % 8 %

If you invest 40% of your money in A and 60% in B, what would be your portfolio's expected rate of return and standard deviation?

9.9%; 3%

9.9%; 1.1%

11%; 1.1%

11%; 3%

None of the options are correct.

Solutions

Expert Solution

Ans is 9.9%;1.1%

Calculations-

 

jeff jeffy answered 2 years ago
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