Given the following information,what is the standard deviation of the returns on a portfolio that is invested 35 percent in both Stocks A and C,and 30 percent in Stock B?
A)2.77 percent
B)4.13 percent
C)6.67 percent
D)8.91 percent
E)9.36 percent

Question

Given the following information,what is the standard deviation of the returns on a portfolio that is invested 35 percent in both Stocks A and C,and 30 percent in Stock B? 
A)2.77 percent 
B)4.13 percent 
C)6.67 percent 
D)8.91 percent 
E)9.36 percent

Quizplus · Accepted Answer

E(R_Boom) = (0.35 × 0.164) + (0.30 × 0.318) + (0.35 × 0.114) = 0.1927E(R_Normal) = (0.35 × 0.112) + (0.30 × 0.196) + (0.35 × 0.073) = 0.12355E(R_Portfolio) = (0.20 × 0.1927) + (0.80 × 0.12355) = 0.13738Variance = 0.20(0.1927 - 0.13738)² + 0.80(0.12355 - 0.13738)² = 0.000765Standard deviation = √0.000765 = 2.77 percent

Given the Following Information,what Is the Standard Deviation of the Returns