Consider the Following Probability Distribution for Stocks a and B

question 37

Multiple Choice

Consider the following probability distribution for stocks A and B: $$\begin{array} { c c c c } \text { State } & \text { Probability } & \text { Return on Stock A } & \text { Return on Stock B } \\1 & 0.10 & 10 \% & 8 \% \\2 & 0.20 & 13 \% & 7 \% \\3 & 0.20 & 12 \% & 6 \% \\4 & 0.30 & 14 \% & 9 \% \\5&0.20 & 15 \% & 8 \%\end{array}$$
The expected rate of return and standard deviation of the global minimum variance portfolio,G,are __________ and ___________,respectively.

• A) 10.07%;1.05%
• B) 8.97%;2.03%
• C) 10.07%;3.01%
• D) 8.97%;1.05%
• E) none of these

---

Definitions:

Pressure

A physical force exerted on or against an object by something in contact with it, or the stress or urgency of matters demanding attention or action.

Taste Receptor Cells

Specialized cells located on the taste buds of the tongue, responsible for detecting taste stimuli.

Dissolved

The process by which a solid becomes incorporated into a liquid to form a solution.

Hair Follicle

A small tubular cavity containing the root of a hair, from which the hair grows and into which sebaceous (oil) glands open.