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?

Expert Solution

jeff jeffy answered 2 years ago

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