Consider the following table which describes the


Question: Consider the following table which describes the probabilities of random outcomes for the returns on General Motors and Apple Stock.

State of world             probability                   Return GM                  Return Apple

1                                  0.5                               0.1                               0.3

2                                  0.5                               0.3                               0.1

Calculate the expected return and standard deviation of the return for GM and Apple.

Consider a portfolio made up of these two stocks, with x being the fraction invested in GM. There is only one efficient portfolio. What is it, and why is it the only efficient portfolio?

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Basic Statistics: Consider the following table which describes the
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