What is the standard deviation of the returns on a $30,000 portfolio that consists of stocks S and T? Stock S is valued at $21,000.
State of Economy |
Probability of State of Economy |
Return if State Occurs |
| |
|
Stock S |
Stock T |
| Boom |
5% |
11% |
5% |
| Normal |
85 |
8 |
6 |
| Recession |
10 |
-5 |
8 |