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There are only two possible states of the economy. State 1 has a 65% chance of...

There are only two possible states of the economy. State 1 has a 65% chance of occurring. In State 1, Asset A returns 6.75% and Asset B returns 9.75%. In State 2, Asset A returns -3.70% and Asset B returns -6.70%. A portfolio of just these two assets is invested 45% in Asset A (with Asset B comprising the remainder without any negative weights). What is the standard deviation of the portfolio's returns?

Question 6 options:

5.90%

6.07%

6.23%

6.39%

6.56%

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jeff jeffy answered 1 year ago
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