Estimated Profits for an Investor Would Depend on How Successful

Multiple Choice

Estimated profits for an investor would depend on how successful a bailout bill would be in helping the U.S.economy.The estimated annual return for two different investment strategies are shown in the following table.If there is a 30% chance that the economy will decline, 50% that there will be no change and 20% chance that it will rebound, the standard deviation associated with the investment strategy of allocating 80% to stocks and 20% to bonds is ________________________ .

A) $1782
B) $2245
C) $2567
D) $3473
E) $4500