In: Finance
Consider the following information.
State of Economy |
Security A |
Security B |
Portfolio Return |
Boom |
12% |
10% |
|
Normal |
7% |
9% |
|
Recession |
-4% |
-1% |
You allocate 40% in security A and 60% in security B to create a portfolio. What is the expected return of the portfolio? (10 points)
What is the standard deviation of the portfolio? (10 points)