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QUESTION 3 The current T-bill money market rate is 3%. The following table contains the...

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QUESTION 3 The current T-bill money market rate is 3%. The following table contains the probability distribution for the two stocks you are considering: Stock Expected Return Variance PFE 0.20 0.16 NSD 0.14 0.09 The correlation coefficient between PFE and NSD is 0.8. If you short sell $5,000 of NSD and use the proceeds along with $5,000 in your savings account to purchase PFE, what is the expected return on your portfolio? A. 0.17 B. 0.26 OC. 0.19 D. 0.21

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