Consider the Following Probability Distribution for Stocks a and B

question 5

Multiple Choice

Consider the following probability distribution for stocks A and B: $$\begin{array} { c c c c } \text { State } & \text { Probability } & \text { Return on Stock A } & \text { Return on Stock B } \\1 & 0.10 & 10 \% & 8 \% \\2 & 0.20 & 13 \% & 7 \% \\3 & 0.20 & 12 \% & 6 \% \\4 & 0.30 & 14 \% & 9 \% \\5 & 0.20 & 15 \% & 8 \% \\\hline\end{array}$$ 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%

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Definitions:

Disclosing Identity

The act of revealing or making known one's identity.

Authority

The power or right to give orders, make decisions, and enforce obedience, or an individual or organization possessing this power.

Warranty of Authority

A legal assurance by an agent to a third party that they have the authority to act on behalf of another person or entity.

Estate

The collective net worth of an individual, including all of their assets, property, and financial interests, especially as considered in the context of succession or inheritance.