Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider the following: state of economy probability of state of economy stock A rate of return stock B rate of return stock C rate of

Consider the following:

state of economy probability of state of economy stock A rate of return stock B rate of return stock C rate of return
boom .14 .11 .36 .51
normal .51 .19 .21 .29
bust .35 .20 -.20 -.39

A. If your portfolio is invested 44 percent each in A and B and 12 percent in C, what is the portfolios expected return, the variance, and the standard deviation? (Do not round intermediate calculations. Round your variance answer to 5 decimal places, e.g., 32.16161. Enter your other answers as a percent rounded to 2 decimal places, e.g., 32.16.)

EXPECTED RETURN? __________________%

VARIANCE? __________________

STANDARD DEVIATION?________________%

B. If the expected T-bill rate is 4.2 percent, what is the expected risk premium on the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

EXPECTED RISK PREMIUM?____________%

**** Please provide me the answers for A: parts 1,2, & 3 and for part B 1

I dont have excel on my laptop cant do the work if you can explain do not provide excel explenation...ty....

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

A Guide To Starting Your Hedge Fund

Authors: John Thompson, Erik Serrano Berntsen

1st Edition

0470519401, 978-0470519400

More Books

Students also viewed these Finance questions

Question

What is the preferred personality?

Answered: 1 week ago