Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider the following information: State of Economy Boom Good Poor Probability of State of Economy 0.20 0.50 0.30 Rate of Return Stock A Stock

Consider the following information: State of Economy Boom Good Poor Probability of State of Economy 0.20 0.50 Be Beam= Be Good = Be poat = b. What is the expected return of the portfolio (in percent)? C. What is the

Consider the following information: State of Economy Boom Good Poor Probability of State of Economy 0.20 0.50 0.30 Rate of Return Stock A Stock B Stock C 0.10 0.10 0.50 0.10 0.10 0.20 0.10 -0.08 0.40 Portfolio's Rate of Return a. Your portfolio is invested 30 percent in A, 30 percent in B and 40 percent in C. What is your portfolio return for each state (in percent)? Be Beam= Be Good = Be poat = b. What is the expected return of the portfolio (in percent)? C. What is the variance of this portfolio? d. What is the standard deviation of this portfolio (in percent)?

Step by Step Solution

3.44 Rating (154 Votes )

There are 3 Steps involved in it

Step: 1

To calculate the portfolio return expected return variance and standard deviation well use the given information about the state of the economy the ra... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Understanding Basic Statistics

Authors: Charles Henry Brase, Corrinne Pellillo Brase

6th Edition

978-1133525097, 1133525091, 1111827028, 978-1133110316, 1133110312, 978-1111827021

More Books

Students also viewed these Finance questions

Question

=+a. At least one plant is completed by the contract date.

Answered: 1 week ago