Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Can someone answer this question? 3. You want to build a portfolio. You have a few stocks that you want to put in your US
Can someone answer this question? 3. You want to build a portfolio. You have a few stocks that you want to put in your US Market Portfolio portfolio. Their payoffs are: States Probability Return 15% 10% -5% Stock A Stock B Stock CT-Bill | 24.60% | 11.40%|-11.40%| 3% 2% 1090 | | 80 % | 16.40%| 7.60%|-7.60%| 2 10% 1% Expected Payoff 14.60% | 6.90% | -6.40% | 72.13%-12.62%24.97%2 Variance You decide to put these three stocks into your portfolio, with portions of 30% (Stock A), 40% (Stock B), and 30% (Stock C). Calculate the expected return and variance of the portfolio. Comment on the expected payoff and variance of the portfolio comparing to the expected payoffs and variances of each stock. What is the beta of this portfolio
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started