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Below are the returns for two assets under different states of the economy. State Recession Expansion Probability 1/3 2/3 Asset 1 -4% 26% Asset 2
Below are the returns for two assets under different states of the economy.
State | Recession | Expansion |
Probability | 1/3 | 2/3 |
Asset 1 | -4% | 26% |
Asset 2 | 2% | 17% |
Suppose you have invested 60% of your money in Asset 1 and the remainder in Asset 2. What are the expected return and standard deviation of your portfolio? show work please
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