|
State
|
Probability
|
Firm A
|
Firm B
|
|
Recession
|
.1
|
-15%
|
-2%
|
|
Normal
|
.6
|
9%
|
3%
|
|
Boom
|
.3
|
12%
|
18%
|
|
Beta
|
|
1.1
|
1.6
|
Suppose you have a portfolio consisting of $15,000 invested in Firm A stock and $35,000 invested in Firm B stock. What is the portfolio's standard deviation?