Question
Consider the following information: Rate of Return If State Occurs State of Probability of Economy State of Economy Stock A Stock B Stock C Boom
Consider the following information: |
Rate of Return If State Occurs | ||||||||||||
State of | Probability of | |||||||||||
Economy | State of Economy | Stock A | Stock B | Stock C | ||||||||
Boom | .20 | .32 | .42 | .22 | ||||||||
Good | .50 | .17 | .13 | .11 | ||||||||
Poor | .25 | .04 | .07 | .05 | ||||||||
Bust | .05 | .12 | .17 | .09 | ||||||||
a. | Your portfolio is invested 28 percent each in A and C, and 44 percent in B. What is the expected return of the portfolio? (Do not round intermediate calculaitons. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
Expected return | % |
b-1 | What is the variance of this portfolio? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., 32.16161.) |
Variance |
b-2 | What is the standard deviation? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
Standard deviation | % |
THIS IS NOT THE RIGHT ANSWER:
(a)
The expected return of the portfolio is
So expected return of the portfolio is 11.29%.
-------------------------
b-1
Portfolio variance is
So required variance is
------------------------------
b-2
Standard devaition of the portfolio is
So
standard deviation is 14.44%.
please tell me where i went wrong
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