# The joint probability distribution

The joint probability distribution on the returns of two securities X and Y is shown in the table below.

X

Y 7 10 14

8 0.12 0.03 0.3

9 0.15 0.09 0.06

10 0.05 0.18 0.02

a. Calculate the expected return for each security

b. Calculate the variance and standard deviation for each security

c. Suppose an investor would like to constitute a portfolio of 40 % of X and 60 % of Y, what will be the expected return and the risk associated to this portfolio?

https://brainmass.com/economics/econometrics/joint-probability-distribution-example-problem-51139

#### Solution Summary

The joint probability distribution is determined.

$2.19