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Given the following information, calculate the expected return and standard deviation for a portfolio that has 50 percent invested in Stock A, 20 percent in
Given the following information, calculate the expected return and standard deviation for a portfolio that has 50 percent invested in Stock A, 20 percent in Stock B, and the balance in Stock C.
Returns | ||||||||||||
State of | Probability of | |||||||||||
Economy | State of Economy | Stock A | Stock B | Stock C | ||||||||
Boom | .80 | 15 | % | 18 | % | 25 | % | |||||
Bust | .20 | 16 | 0 | 16 | ||||||||
Expected return | % |
Standard deviation | % |
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