What Is the Standard Deviation of the Returns on a $30,000

Multiple Choice

What is the standard deviation of the returns on a $30,000 portfolio that consists of Stocks S and T? Stock S is valued at $18,000. $$\begin{array} { l c c } { \text { State of } } & \text { Probability of } & \text { Rate of Return } \\\text { Econony } & \text { State of Economy } & \text { if State Occurs } \\ & &\begin{array}{ll}\text { Stock S } & \text { Stock T }\end{array}\\\text { Boom } & .05& \begin{array}{ll}.11& \quad \quad .09\end{array} \\\text { Normal } & .85 & \begin{array}{ll}.08 & \quad \quad.07\end{array} \\\text { Bust } & .10&\begin{array}{ll}-.05& \quad \quad .04\end{array}\end{array}$$

A) 2.07 percent
B) 2.80 percent
C) 3.36 percent
D) 2.49 percent
E) 3.63 percent