A Portfolio Consists of 35 Percent of Stock S and 65

Multiple Choice

A portfolio consists of 35 percent of Stock S and 65 percent of Stock T.Stock S is expected to return 15 percent if the economy booms,10 percent if it is normal,and lose 19 percent if it is recessionary.Stock T will return 26 percent in a boom,15 percent in a normal economy,and lose 40 percent in a recession.The probability of a boom is 5 percent and probability of a recession is 10 percent.What is the portfolio standard deviation?

A) 11.69%
B) 14.05%
C) 14.22%
D) 12.10%
E) 12.33%