You Have a Portfolio That Is Comprised of 40% of Stock

Multiple Choice

You have a portfolio that is comprised of 40% of Stock A and 60% of Stock B. What is the variance of the portfolio?
$\begin{array}{lllr}\text { State of the Economy } & \text { Probability } &\text {E(R) }_{A}&\text { E(R) }_{B}\\&&40\%&60\%\\\\\text { Normal } & .7 & 12\% & 14 \% \\\text { Recegsion } & .3 & -7 \% & -10 \%\end{array}$

A) 101.64%
B) 102.13%
C) 106.84%
D) 107.15%
E) 108.93%