Question
Individual State 1 Return (p=0.3) State 2 Return (p=0.5) State 3 Return (p=0.2) A 5% 11% 9% B 6% 8% -3% Given the above information
Individual | State 1 Return (p=0.3) | State 2 Return (p=0.5) | State 3 Return (p=0.2) |
A | 5% | 11% | 9% |
B | 6% | 8% | -3% |
Given the above information on two investments A and B, calculate the following statistics:
1. Calculate the Expected Return for A. Give your answer in decimal form to 3 decimals places. For example, 9% is 0.09.
2. Calculate the standard deviation for A. Give your answer in decimal form to 3 decimals places. For example, 9% is 0.09.
3. Calculate the Expected Return for B. Give your answer in decimal form to 3 decimals places. For example, 9% is 0.09.
4. Calculate the standard deviation for B. Give your answer in decimal form to 3 decimals places. For example, 9% is 0.09.
5. Assume that the expected return for A is 10% and the expected return for B is 5.5%. Calculate the expected return on a portfolio consisting of 60% A and 40% B. Give your answer in decimal form to 3 decimals places. For example, 9% is 0.09.
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