Consider the Following Probability Distribution for Stocks C and D

question 28

Multiple Choice

Consider the following probability distribution for stocks C and D: $\begin{array}{cccc}\text { State } & \text { Probability } & \text { Return on Stock C} & \text { Return on Stock D } \\1 & 0.30 & 7\% & -9\% \\2 & 0.50 & 11\% & 14\% \\3 & 0.20 & -16\% & 26\%\end{array}$

If you invest 25% of your money in C and 75% in D, what would be your portfolio's expected rate of return and standard deviation?

• A) 9.891%; 8.70%
• B) 9.945%; 11.12%
• C) 8.225%; 8.70%
• D) 10.275%; 11.12%

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