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please answer this a and b that both related, manually not using excel You want to invest your money in stock A, stock B and
please answer this a and b that both related, manually not using excel
You want to invest your money in stock A, stock B and stock C. You know that the economy can either go in depression, recession, normal or bloom. You also know the following information about your three stocks: Stock's Return (RM) Scenario Probability TA rB rc Depression 1/4 -20% 5% -5% Recession 1/4 10% 20% 5% Normal 1/4 30% -12% 5% Boom 1/4 50% 9% -3% Table 1 Calculate the expected return for stock A, B and C. (7.5 Marks) b. The expected return of a portfolio that consists of stock B & C only with equal investments in stock B and C. (1 Marks) [Total: 8.5 Marks]Step by Step Solution
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