Question
A portfolio is composed by 3 assets as defined in the table below. State of Economy Probability State of Economy Assets Return A Weight 25%
A portfolio is composed by 3 assets as defined in the table below.
| State of Economy | Probability State of Economy | Assets | ||
| Return A Weight 25% | Return B Weight 30% | Return C Unknown | ||
| Bad | 15% | -0.01 | -0.02 | 0.02 |
| Average | Unknown | 0.05 | 0.09 | 0.83 |
| Good | 60% | 0.16 | 0.123 | 0.23 |
Calculate the expected return of this portfolio.
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Social Finance Shadow Banking During The Global Financial Crisis
Authors: Neil Shenai
1st Edition
3030082318, 978-3030082314
