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Consider the following probability distribution of returns estimated for Projects B, C and D. Construct an...

Consider the following probability distribution of returns estimated for Projects B, C and D. Construct an equal-weighted (50/50) portfolio of Investments B and D.

State Probability B C D
Very poor 0.1 25% -25% 15%
Poor 0.2 15% -5% 10%
Average 0.4 10% 15% 0%
Good 0.2 0% 35% 25%
Very good 0.1 -10% 55% 35%

The expected rate of return of the portfolio is 10.25.

What is the standard deviation?

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