Question
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 | .73 | .11 | .05 | .41 |
| Bust | .27 | .30 | .36 | .21 |
What is the expected return on an equally weighted portfolio of these three stocks?
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 a portfolio invested 28 percent each in A and B and 44 percent in C?
Consider the following information: a. What is the expected return on an equally weighted portfolio of these three stocks? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. What is the variance of a portfolio invested 28 percent each in A and B and 44 percent in C? Note: Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161Step by Step Solution
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Financial Statement Analysis & Dividend Investing
Authors: Andrew P.C.
1st Edition
1075873940, 978-1075873942
