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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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