Question
Consider a portfolio with 45% invested in Stock A, 20% invested in Stock B and 35% invested in Stock C. The probability of a Weak
Consider a portfolio with 45% invested in Stock A, 20% invested in Stock B and 35% invested in Stock C.
The probability of a Weak Economy is 0.1, the probability of a Strong Economy is 0.1, and the probability of an Average Economy is 0.8
Stock A pays 2.6% in a Weak Economy, -1.7% in a Strong Economy, and -5.4% in an Average Economy
Stock B pays 4% in a Weak Economy, 9.9% in a Strong Economy, and 5.1% in an Average Economy
Stock C pays -2.5% in a Weak Economy, 3.1% in a Strong Economy, and 0.2% in an Average Economy
Read the information above carefully.
First create a table that summarizes the information above
Then solve for the Expected Return of the Potfolio
Include your answer as a percentage to two decimals and with a negative if appropriate
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