Question
1.You have a portfolio consisting solely of Stock A and Stock B. The portfolio has an expected return of 9.6 percent. Stock A has an
1.You have a portfolio consisting solely of Stock A and Stock B. The portfolio has an expected return of 9.6 percent. Stock A has an expected return of 12.6 percent while Stock B is expected to return 6.6 percent. What is the portfolio weight of Stock A? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
2.The common stock of Manchester & Moore is expected to earn 14.2 percent in a recession, 8 percent in a normal economy, and lose 5.2 percent in a booming economy. The probability of a boom is 15 percent while the probability of a recession is 6 percent. What is the expected rate of return on this stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
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