The following returns have been estimated for Security T and Security S: Scenario Security T Security S 1 20% 10% 2 13% -6% 3 15% 20% Each scenario is...

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Finance

The following returns have been estimated for Security T andSecurity S:
Scenario
Security T
Security S
1
20%
10%
2
13%
-6%
3
15%
20%
Each scenario is equally likely to occur, and you plan to invest70% in Security T and 30% in Security S. What is the standarddeviation of the rate of return of the portfolio? Round your answerto the nearest tenth of a percent.
A) 0.0%
B) 4.5%
C) 19.9%
D) 59.7%

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4.1 Ratings (775 Votes)

Solution Answer is B 45 Working Notes Each scenario is equally likely to occur Means each Scenario probability 13 as there are three scenario Hence Weight in the portfolio 70 30 Probability Scenario Security T Security S 13 1 20 10 13 2 13 6 See Answer

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Scenario	Security T	Security S
1	20%	10%
2	13%	-6%
3	15%	20%

The following returns have been estimated for Security T and Security S: Scenario Security T Security S 1 20% 10% 2 13% -6% 3 15% 20% Each scenario is...

80.2K

Verified Solution

Question

Finance

Answer & Explanation Solved by verified expert

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