What is the standard deviation of the returns on a portfolio that is invested in stocks...
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What is the standard deviation of the returns on a portfolio that is invested in stocks A, B, and C? Twenty five percent of the portfolio is invested in stock A and 40 percent is invested in stock C. State of Economy Probability of Returns if State Occurs State of Economy Stock A Stock B Stock C Boom 5% 17% 6% 22% Normal 55% 8% 10% 15% Recession 40% -3% 19% -25% 6.31 percent 6.49 percent 7.40 percent 7.83 percent 8.72 percent What is the standard deviation of the returns on a portfolio that is invested in stocks A, B, and C? Twenty five percent of the portfolio is invested in stock A and 40 percent is invested in stock C. State of Economy Probability of Returns if State Occurs State of Economy Stock A Stock B Stock C Boom 5% 17% 6% 22% Normal 55% 8% 10% 15% Recession 40% -3% 19% -25% 6.31 percent 6.49 percent 7.40 percent 7.83 percent 8.72 percent
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