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Can anyone answer a) and b)? Thanks! Consider the following information: State of Economy Probability of State of Economy Rate of Return if State Occurs
Can anyone answer a) and b)? Thanks!
Consider the following information:
State of Economy | Probability of State of Economy | Rate of Return if State Occurs | ||||||||||
Stock A | Stock B | Stock C | ||||||||||
Boom | 0.62 | 0.09 | 0.17 | 0.35 | ||||||||
Bust | 0.38 | 0.20 | 0.06 | 0.10 | ||||||||
a. What is the expected return on an equally weighted portfolio of these three stocks? (Do not round intermediate calculations. Round the final answer to 2 decimal places.)
Expected return %
b. What is the variance of a portfolio invested 20% each in A and B and 60% in C? (Do not round intermediate calculations. Round the final answer to 6 decimal places.)
Variance
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