Question
Please answer use formulas and step by step Year Probability Stock returns Stock returns BCDE FGHI 1 0,25 0,18 0,28 2 0,20 0,15 0,24 3
Please answer use formulas and step by step
Year | Probability | Stock returns | Stock returns |
BCDE | FGHI | ||
1 | 0,25 | 0,18 | 0,28 |
2 | 0,20 | 0,15 | 0,24 |
3 | 0,35 | 0,18 | 0,20 |
4 | 0,20 | 0,24 | 0,18 |
From the data above, James owns 2 stocks and has the same probability return distribution
Calculate: 1). Expected Return E(R) , BCDE Shares and FGHI Shares 2). Variance and Standard Deviation of BCDE Stock and FGHI Stock, respectively 3).Calculate Covariance between BCDE and FGHI Shares (Cov bcde,fghi) 4). If the two stocks will form a portfolio with a weight/portion of 50% each. Calculate the Expected Return and Standard Deviation of the portfolio!
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started