Ashish owns three stocks & has estimated the following joint probability distribution of returns:

Posted by: Pdfprep Category: GLO_CWM_LVL_1 Tags: , ,

Ashish owns three stocks & has estimated the following joint probability distribution of returns:

Calculate the portfolio’s expected return & standard deviation if Ashish invests 20% in stock X, 50% in stock Y & 30% in stock Z. Assume that each security is completely uncorrelated with the return of other securities.
A . 6.25%, 6.54
B . 5.25%, 2.55
C . 8.45%, 3.75
D . 4.25%, 6.54

Answer: A