A portfolio is expected to return 16 in a booming economy, Ask an Expert

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A portfolio is expected to return 16 percent in a booming economy, 12 percent in a normal economy, and 22 percent in a recessionary economy. The probability of either a booming economy or a recessionary economy is 5 percent each. What is the standard deviation of these expected returns?

a. 7.51 percent
b. 7.67 percent
c. 8.04 percent
d. 8.23 percent

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