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Based on the following information, please answer the question. State of Economy Probability Stock ABCs return Stock XYZs return Boom 20% 35% 0% Recession 80%
Based on the following information, please answer the question.
State of Economy | Probability | Stock ABCs return | Stock XYZs return |
Boom | 20% | 35% | 0% |
Recession | 80% | 10% | 10% |
If you form a portfolio by investing 70% of your money in Stock ABC and 30% money in stock XYZ, what are the expected return and standard deviation of your portfolio?
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E(RP)=20.2% ; P=9.32%.
E(RP)=12.9% ; P=9.83%.
E(RP)=12.9% ; P=5.80%.
E(RP)=15.5% ; P=7.76%.
E(RP)=20.2% ; P=6.64%.
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