Stock Q Is Expected to Return 14 Percent in a Boom

Multiple Choice

Stock Q is expected to return 14 percent in a boom and 8 percent in a normal economy.Assume Stock R will return 11 percent in a boom and 10 percent in a normal economy.The probability of a boom is 13 percent.Otherwise,the economy will be normal.What is the standard deviation of a portfolio that is invested 48 percent in stock Q and 52 percent in stock R?

A) 0.78%
B) 1.42%
C) 1.14%
D) 0.67%
E) 1.61%