Question
P13-10 Returns and Standard Deviations [LO1] Consider the following information: Rate of Return if State Occurs State of Economy Probability of State of Economy Stock
P13-10 Returns and Standard Deviations [LO1]
| Consider the following information: |
| Rate of Return if State Occurs | ||||
| State of Economy | Probability of State of Economy | Stock A | Stock B | Stock C |
| Boom | .30 | .43 | .41 | .42 |
| Good | .30 | .17 | .14 | .15 |
| Poor | .10 | .11 | .05 | .09 |
| Bust | .30 | -.01 | -.01 | -3.91 |
| | ||||
| Requirement 1: |
| Your portfolio is invested 18 percent each in A and C, and 64 percent in B. What is the expected return of the portfolio?(Do not round your intermediate calculations.) |
| Requirement 2: |
| (a) | What is the variance of this portfolio?(Do not round your intermediate calculations.) |
| (b) | What is the standard deviation?(Do not round your intermediate calculations.) |
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Technology And Finance Challenges For Financial Markets Business Strategies And Policy Makers
Authors: Morten Balling, Frank Lierman, Andy Mullineux
1st Edition
041529827X, 978-0415298278
