What Is the Standard Deviation of a Portfolio That Is

Multiple Choice

What is the standard deviation of a portfolio that is invested 40% in stock Q and 60% in stock R? $$\begin{array} { l l c c c } \text { State of } & \text { Probability of } & { \text { Returns if State Occurs } } \\\text { Economy } & \text { State of Economy } & \text { Stock } Q & \text { Stock R } \\\text { Boom }&25\% & 18 \% & 9 \% \\ \\\text { Normal }& 75 \% & 9 \% & 5 \%\\\end{array}$$

A) 0.7%
B) 1.4%
C) 2.6%
D) 6.8%
E) 8.1%