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Hi, Mr. Samad can invest in GHB stock or KYM stock. His projection of the returns on these two stocks is as follows: State Probability
Hi, Mr. Samad can invest in GHB stock or KYM stock. His projection of the returns on these two stocks is as follows:
State | Probability | Return on GHB (%) | Return on KYM (%) |
Bust | 0.25 | -2.0 | 5.0 |
Normal | 0.60 | 9.2 | 6.2 |
Boom | 0.15 | 15.4 | 7.4 |
Required:
- Calculate the expected return of each stock
- Calculate the standard deviation of return of each stock
- Calculate the expected return on the portfolio if Mr. Samad invested 40% in GHB and 60% in KYM.
- Calculate the standard deviation on the portfolio. Pkease don't write on a paper. tq
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