Compute the expected return and standard deviation of each, Ask an Expert

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Miss Maple is considering two securities, A and B, with the relevant information given below:

State of Economy Probability Return on Security A Return on Security B

Bear 0.4 3.0 % 6.5%
Bull 0.6 15% 6.5%

a. Compute the expected return and standard deviation of each of the two securities.

b. Assume Miss Maple invested $2,500 in Security A and $3,500 in security B. Calculate the expected return and standard deviation for her portfolio.

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