Question

Here are the expected returns on two stocks: Returns Probability X Y 0.1 -20% 10% 0.8 20 15 0.1 40 20 If you form a 50-50 portfolio of the two stocks, what is the portfolio's standard deviation? a. 8.1% b. 10.5% c. 13.4% d. 16.5% e. 20.0%