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Following are the probability distribution of returns of portfolio of Stock A and Stock B in equal proportion of weight in each state of economy.
Following are the probability distribution of returns of portfolio of Stock A and Stock B in equal proportion of weight in each state of economy. A) Expected Return of stock X and stock Y [7] B) Standard deviation of Stock X and Stock Y [7] C) Based on your finding suggest which stock is better if you consider risk as basis of buying stock important factor [3] D) Based on your finding suggest which stock is better if you consider return as basis of buying stock [3] (Non-anonymous question o) (20 Points) State of Economy 1 2 3 WIN Probablity 0.1 0.2 0.4 0.1 0.2 Return on Stock X (%) 20% -4096 50% 35% 25% Return on Stock Y % -60% 15% 455 50% 35%
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