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Use the following information to answer the question below.

State

Probability

Return on A

Return on B

Boom

0.2

12%

6%

Normal

0.5

8%

20%

Bust

0.3

4%

-16%

What is the standard deviation of return of a portfolio with weights of 40% in security A and the remainder in security B?

  • 0.048
  • 0.089
  • 0.125
  • 0.101
  • 0.075

Business Management, Management Studies

  • Category:- Business Management
  • Reference No.:- M91646270

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