Question
You are looking into putting 2 new stocks into your portolfio.TEFLA and GAAGLE.Your stock broker hasprovided you with the returns for both stocks in a
You are looking into putting 2 new stocks into your portolfio.TEFLA and GAAGLE.Your stock broker hasprovided you with the returns for both stocks in a Bear Market, Normal Market and Bull Market the probability ofeach Market is 1/3 or 33.3333333%.
State of Economy. TEFLA Return. GAAGLE Return
Bear 9.90% -7.30%
Normal 11.3% 12.80%
Bull 5.90% 29.30%
You are concerned not only with your expected return but also with the risk you are assuming on each stock.Sinceyou may put both stocks into your portfolio, you are concerend with how TEFLA and GAAGLE relate to each otherover various market scenarios.Calculate the Expected Return, Standard Deviaiton for each stock as well as theCorrelation of TEFLA and GAGGLE
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