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13a) You are going to make a portfolio consisting of 70 % of Lloyds of London Stock and 30 % of Tencent Stock. You also

13a)

You are going to make a portfolio consisting of 70 % of Lloyds of London Stock and 30 % of Tencent Stock. You also have the following information:

State i Probability of State i LofL Return Tencent Return
Boom 50 % 23 % 10 %
Bust 50 % -10 % 56 %

What is the expected return for the portfolio? (Answer as a percentage and Round to 2 decimals)

Answer:

13b)

Consider the following information:

State i Probability of State i Actual Return of Google
Boom 69 % 23 %
Bust 31 % 4 %

What is the expected Return on Google Stock? (Answer as a percentage and Round to 2 decimals)

Answer:

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