You have been assigned to examine the following funds with their respective probabilities: Stock Fund X...

You have been assigned to examine the following funds with their respective probabilities:

Stock Fund X

Stock Fund Y

Scenario

Probability

Rate of Return (%)

Severe recession

0.05

-5

11.2

Mild recession

0.15

-1.6

3.3

Normal growth

0.55

7.7

0.5

Boom

0.25

16.3

-4.1

Calculate the standard deviation of a portfolio that invests 55% on stock fund X and 45% on stock fund Y.

Remember to state your answer as a percentage. For example, 99.99%.

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Expert Solution

jeff jeffy answered 1 year ago

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