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An investor is considering the purchase of Gryphon stock, which has returns given in the table below.

                            probabilty                rate of return

recession                  0.11                        -4%

normal                       0.4                         11%

boom                        0.49                        15%


expected return = 11.31

standard deviation = 5.70


Q: The investor decides to diversify by investing $3,000 in Gryphon stock and $2,000 in Royal stock, which has an expected return of 5.5% and a standard deviation of 9.4%. The correlation coefficient for the two stocks' returns is 0.8. Calculate the expected return and standard deviation of the portfolio. Round your answers to 2 decimal places.
finance   Introductory-Finance   Stocks   Expected-Return   math   
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