Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Consider the following probability distribution of return for stocks A and B. State Probability Return on Stock A % Return on Stock B % 1
Consider the following probability distribution of return for stocks A and B.
State | Probability | Return on Stock A % | Return on Stock B % |
1 | 0.10 | 10
| 8 |
2 | 0.20 | 13
| 7 |
3 | 0.20 | 12
| 6 |
4 | 0.30 | 14
| 9 |
5 | 0.20 | 15
| 8 |
The variances of stocks A and B are --- and ---, respectively.
a.
2.1%%; 1.8%%.
b.
1.5%%; 1.1%%
c.
2.2%%; 1.2%%
d.
3.2%%; 2.0%%
e.
1.5%%; 1.9%%
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started