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If you invest 40% of your money in A and 60% in B, what would be your portfolio's expected rate of return and standard deviation? Group of answer choices 11%; 1.1% 9.9%; 1.1% 9.9%; 3% 11%; 3% None of the options are correct.

Sagot :

The rate of return and standard deviation is: 9.9%; 1.1%.

Rate of return and standard deviation

Rate of return:

Rate of return= (.4)(13.2) + (.6)(7.7)

Rate of return=5.28%+4.62%

Rate of return=9.9%

Standard deviation:

Standard deviation=√[(.4×1.47)² + (.6×1.10)²+ 2(.4)(.6)(.76)]

Standard deviation=1.1%

Inconclusion the rate of return and standard deviation is: 9.9%; 1.1%.

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