Question
Consider the following information: Rate of Return if State Occurs State of Economy Probability of State of Economy Stock A Stock B Stock C Boom
Consider the following information:
|
|
| Rate of Return if State Occurs | ||
| State of Economy | Probability of State of Economy | Stock A | Stock B | Stock C |
| Boom | .25 | .23 | .39 | .26 |
| Good | .15 | .12 | .15 | .16 |
| Poor | .30 | .02 | .12 | .03 |
| Bust | .30 | .18 | .18 | .11 |
a. Your portfolio is invested 35 percent each in Stocks A and C and 30 percent in Stock B. What is the expected return of the portfolio?
b. What is the variance of this portfolio? What is the standard deviation?
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Personal Financial Planning
Authors: Randy Billingsley, Lawrence J. Gitman, Michael D. Joehnk
15th Edition
978-0357438480, 0357438485
