Suppose you have $20,000 total. You invest $15,000 in Stock X and the remainder in Stock Y
State of the economy Probability Return on Stock Return on Stock Y
Recession 0.1 4% -17%
Normal 0.6 9% 12%
Boom 0.3 17% 27%
What will be the standard deviation on your portfolio?
a. 6.1196
b. 21.59%
c. 14.36%
d. 12.17%
