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Consider the following two stocks. Stock A Stock B Probabilities (Pi) P1 35% |-10% 10% Recession Normal Boom 1% -9% P2 = 26% P3 =
Consider the following two stocks. Stock "A" Stock "B" Probabilities (Pi) P1 35% |-10% 10% Recession Normal Boom 1% -9% P2 = 26% P3 = 39% 11% 24% The portfolio weights for stocks "A" and "B" are 0.2 and 0.8, respectively. What are the expected returns of stock "A" and "B"? Enter your answers as a percentage. Do not put the percent sign in your answers. Round your answers to 2 DECIMAL PLACES E(ra)= 1.05 Correct response: 1.65+0.01 E1%) = 10.52 Correct response: 10.52+0.01 Click "Verify" to proceed to the next part of the question. This questions has 4 parts (i.e., you will be clicking "Verify" 4 times) What are the standard deviations of stocks "A" and "B"? Enter your answers as a percentage. Do not put the percent sign in your answers. Round your answers to 2 DECIMAL PLACES. SDa = Number SD Number Click "Verify" to proceed to the next part of the
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