Question

A portfolio offers –6%, +6%, +10%, and +22% in different scenarios, with respective probabilities of 1/6,1/3,1/3,1/6....

A portfolio offers –6%, +6%, +10%, and +22% in different scenarios, with respective probabilities of 1/6,1/3,1/3,1/6. Compute the expected rate of return and standard deviation of this portfolio.

Select one:

a. Average return =8%
Stdev=8.25%

b. Average return =8%
Stdev=10.25%

c. Average return =10%
Stdev=7.25%

d. Average return =6%
Stdev=8.85%

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