Question
Consider the following information on two stocks: P(State) Stock A Stock B Boom 20% 0.25 0.15 Growth 30% 0.15 -0.05 Normal 20% 0.12 -0.06 Bust
Consider the following information on two stocks:
P(State) Stock A Stock B
Boom 20% 0.25 0.15
Growth 30% 0.15 -0.05
Normal 20% 0.12 -0.06
Bust 30% -0.05 0.10
Suppose you invest $40,000 into stock A, and $60,000 into stock B. Calculate the expected return of the portfolio. (Enter percentages as decimals and round to 4 decimals)
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International Financial Management
Authors: Jeff Madura, Roland Fox
4th Edition
147372550X, 9781473725508
