Consider the Following Probability Distribution for Stocks a and B

question 11

Multiple Choice

Consider the following probability distribution for stocks A and B: $\begin{array}{cccc}\text { State } & \text { Probability } & \text { Return on Stock A } & \text { Return on Stock B } \\1 & 0.15 & 8 \% & 8 \% \\2 & 0.20 & 13\% & 7\% \\3 & 0.15 & 12\%& 6\% \\4 & 0.30 & 14\%& 9\% \\5 & 0.20 & 16\% & 11 \%\end{array}$

If you invest 35% of your money in A and 65% in B, what would be your portfolio's expected rate of return and standard deviation?

• A) 9.9%; 3%
• B) 9.9%; 1.1%
• C) 10%; 1.7%
• D) 10%; 3%

---

Definitions:

Construction Labor

A specific category of direct labor that includes wages and benefits provided to workers engaged in the construction and building industries.

Engineers' Fees

Engineers' fees are payments made to engineers for their professional services, which could include consultations, design, project management, or other engineering-related tasks.

Insurance Costs

The expenses incurred by individuals or companies for purchasing insurance coverage, which can include premiums for health, property, liability, and other types of insurance.

Interest

The cost of using someone else's money or the return on invested capital.