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This question is given that assume an investor has two stock a and b.
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Let x and y denote the possible percent return for each of this stock with the joint probability distribution given below.
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Assume the investor has two portfolio as follows.
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Portfolio 1, 10 share of stock a and 20 share of stock b.
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Whereas in portfolio 2, 20 share of stock a and 10 share of stock b.
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So we have to find the mean in the standard deviation of return rate of both portfolio and compare the rate.
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Risk of them using an appropriate measure.
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So first, the marginal probability distribution of x.
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The marginal distribution of x is x and p x is equals to x.
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So it is minus 0 .1 and 0 .20.
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Again 0 .1, 0 .3, 5.
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0 .20 and 0 .45.
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So now the x is equal to sum of x x into p x is equals to x i.
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Therefore it is equals to minus 0 .1 into 0 .20 plus 0 .20 plus 0 .1 plus 0 .1 plus 0 .1 plus 0 .1 plus 0 .1...