Question
Given the following information about the returns of stocks A, B, and C, what is the expected return of a portfolio invested 30% in stock
Given the following information about the returns of stocks A, B, and C, what is the expected return of a portfolio invested 30% in stock A, 40% in stock B, and 30% in stock C?
| State of economy | Probability | Stock A | Stock B | Stock C |
|---|---|---|---|---|
| Boom | 0.14 | 0.31 | 0.39 | 0.32 |
| Good | 0.25 | 0.19 | 0.13 | 0.16 |
| Poor | 0.29 | 0.08 | 0.06 | 0 |
| Bust | -- | -0.22 | -0.22 | -0.2 |
Enter answer in percents.
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
New Issues In Financial Institutions Management
Authors: F Fiordelisi, P Molyneux, D Previati
2010th Edition
0230278108, 978-0230278103
