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How do I calculate the proportion of the Investment in Blue Llama? and the Proportion of the Investment in Hungry Whales Electronics? I understand how
How do I calculate the proportion of the Investment in Blue Llama? and the Proportion of the Investment in Hungry Whales Electronics?
I understand how to calculate the expected return, the answer is (4.69%) but how do I calculate the 75% invested in Blue Llama stock and how do I calculate the 25% invested in Hungry Whales electronics?
\begin{tabular}{cccccc} Market Condition & Probability (1) & Blue Llama Mining (2) & Product (3) =(1) x(2) & Hungry Whale Energy (4) & Product (5) x(4) \\ \hline Strong & 25% & 15% & 3.75% & 21% & 5.25% \\ Normal & 45% & 9% & 4.05% & 12% & 5.40% \\ Weak & 30% & 12% & 3.60% & 15% & 4.50% \\ = & 1.00 & r^BLM= & 4.20% & r^HWE= & 6.15% \\ & & & & \end{tabular} The expected return on Tyler's portfolio is calculated as: r^p=0.75)4.20%)+(0.25)6.15%)=4.69%Step by Step Solution
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