Question
Intro The table below shows the expected rates of return for three stocks and their weights in some portfolio: Stock A Stock B Stock C
Intro
The table below shows the expected rates of return for three stocks and their weights in some portfolio:
| Stock A | Stock B | Stock C | ||
| Portfolio weights | 0.5 | 0.2 | 0.3 | |
| State | Probability | Expected returns | ||
| Recession | 0.1 | 0.03 | 0.02 | -0.04 |
| Normal | 0.5 | 0.06 | 0.06 | 0.03 |
| Boom | 0.4 | 0.11 | 0.08 | 0.11 |
What is the expected portfolio return?
What is the standard deviation of the portfolio returns?
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Introduction To Corporate Finance
Authors: William L. Megginson, M.D. Lucey Brian C., Scott J. Smart, Scott B. Smart, Bill Megginson
1st Edition
184480562X, 9781844805624
