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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 | .15 | .40 | .50 | .30 |
| Good | .60 | .16 | .10 | .09 |
| Poor | .20 | .02 | .05 | .03 |
| Bust | .05 | .18 | .25 | .11 |
| a. | Your portfolio is invested 25 percent each in A and C, and 50 percent in B. What is the expected return of the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
| b-1. | What is the variance of this portfolio? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161.) |
| b-2. | What is the standard deviation? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
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Principles Of Finance With Excel
Authors: Simon Benninga, Tal Mofkadi
3rd Edition
0190296380, 9780190296384
