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9. Returns and Standard Deviations Consider the following information: State of Economy Probability of State of Economy Rate of Return if State Occurs Stock
9. Returns and Standard Deviations Consider the following information: State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B Stock C .07 .18 .27 Boom .12 -.08 -.21 Bust .75 .25 OLKA)=0.750.0+ 0.25x0x2 = 16825 a. What is the expected return on an equally weighted portfolio of these three stocks? b. What is the variance of a portfolio invested 20 percent each in A and B and 60 percent in C
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Financial Institutions Management A Risk Management Approach
Authors: Marcia Cornett, Patricia McGraw, Anthony Saunders
8th edition
978-0078034800, 78034809, 978-0071051590
