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01. There is a 10.60% probability of an average economy and a 89.40% probability of an above average economy. You invest 14.70% of your money
01. There is a 10.60% probability of an average economy and a 89.40% probability of an above average economy. You invest 14.70% of your money in Stock S and 85.30% of your money in Stock T. In an average economy the expected returns for Stock S and Stock T are 13.50% and 12.00%, respectively. In an above average economy the the expected returns for Stock S and T are 17.60% and 25.00%, respectively, what is the expected return for this two stock portfolio? Q2. There is a 17.60% probability of a below average economy and a 82.40% probability of an average economy. If there is a below average economy stocks A and B will have returns of-4.10% and 18.10%, respectively. If there is an average economy stocks A and B will have returns of 9.50% and-6.30%, respectively. Compute the: a) Expected Return for Stock A: c) Standard Deviation for Stock A d) Standard Deviation for Stock B
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