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%