Miller Chapter 4- Q-12

[ArpitB]

Can please anyone help me understand this question?

Imagine we have two independent uniform distributions, A and B. A ranges be
tween −2 and −1, and is zero everywhere else. B ranges between +1 and +2, and
is zero everywhere else. What are the mean and standard deviation of a portfolio
that consists of 50% A and 50% B? What are the mean and standard deviation
of a portfolio where the return is a 50/50 mixture distribution of A and B?

Thank you!

Best,

Arpit

 

[David Harper CFA FRM]

Hi @ArpitB

Does GARP's reading set not include the answers? The book does, here is Miller's answer to 4-12, I hope this helps:

 

[ArpitB]

Thanks a lot, David.