Given the following information, what is the standard deviation of the returns on a portfolio that...

Given the following information, what is the standard deviation of the returns on a portfolio that is invested 40 percent in stock A, 35 percent in stock B, and the remainder in stock C?

State of Economy	Probability of State of Economy	Stock A	Stock B	Stock C
Normal	0.65	14.30%	16.70%	18.20%
Recession	0.35	-9.80%	5.40%	-26.90%

	A	12.72%
	B	14.07%
	C	1.41%
	D	7.41%
	E	11.86%

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Expert Solution

11.86%

jeff jeffy answered 1 year ago

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