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 | 0.76 | 0.11 | 0.09 | 0.13 |
| Bust | 0.24 | 0.13 | 0.13 | 0.17 |
| a. What is the expected return on an equally weighted portfolio of these three stocks? |
|
|
| b. What is the variance of a portfolio invested 20 percent each in A and B and 60 percent in C? |
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Sport Finance
Authors: Gil Fried, Steven Shapiro, Timothy D. Deschriver
2nd Edition
0736067701, 978-0736067706
