Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider the following information: State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B Stock C Boom

Consider the following information:

State of Economy Probability of State of Economy Rate of Return if State Occurs
Stock A Stock B Stock C
Boom .16 .357 .457 .337
Good .44 .127 .107 .177
Poor .34 .017 .027 .057
Bust .06 .117 .257 .097

Your portfolio is invested 32 percent each in A and C and 36 percent in B. What is the expected return of the portfolio?

Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.

What is the variance of this portfolio?

Note: Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161.

What is the standard deviation of this portfolio?

Note: Do not round intermediate calculations

Step by Step Solution

There are 3 Steps involved in it

Step: 1

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

Advanced Finance

Authors: Michael Fardon

1st Edition

1872962319, 1872962173, 978-1872962313, 978-1872962177

More Books

Students also viewed these Finance questions