Calculate the expected return and standard deviation

Reference no: EM131793863

Question: Consider the following table which describes the probabilities of random outcomes for the returns on General Motors and Apple Stock.

State of world probability Return GM Return Apple

1 0.5 0.1 0.3

2 0.5 0.3 0.1

Calculate the expected return and standard deviation of the return for GM and Apple.

Consider a portfolio made up of these two stocks, with x being the fraction invested in GM. There is only one efficient portfolio. What is it, and why is it the only efficient portfolio?

Reference no: EM131793863

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