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  3. the following returns have been estimated for secu

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

  1. 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%

Answer & Explanation Solved by verified expert
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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