1. State of the economy Probability Return on Stock A Return on Stock B “Fiscal Cliff” resolved 0.3 25% -10% “Fiscal Cliff” not resolved 0.7 -5% 30% Suppose you have $10,000 total. If you put $4,000 in Stock A and the remainder in Stock B, what will be the expected return on your portfolio?
a. 12.40% b. 33.50% c. 27.40% d. 20.80% 3.5 points Save
2. What will be the standard deviation on your portfolio?
a. 14.36% b. 5.50% c. 2.17% d. 18.60%