Question
Consider the following information: Economic condition Probability Stock A Return Stock B Return Stock C Return Boom 0.65 6% 16% 33% Bust 0.35 14% 2%
Consider the following information:
Economic condition | Probability | Stock A Return | Stock B Return | Stock C Return |
Boom | 0.65 | 6% | 16% | 33% |
Bust | 0.35 | 14% | 2% | -6% |
What is the expected return of a portfolio with equal weights in these three stocks? What is the variance of a portfolio invested 20% each in A and B, and 60% in C?
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International Financial Reporting Standards An Introduction
Authors: Belverd E. Needles, Marian Powers
3rd Edition
1133187943, 978-1133187943
