Question
Please can you answer in 40 minutes asap Consider following information: Probability of the state of economy Rate of return if state occurs Stock 1
Please can you answer in 40 minutes asap
Consider following information:
| Probability of the state of economy | Rate of return if state occurs | |
Stock 1 | Stock 2 | ||
Recession | 0.2 | -3 % | 1 % |
Boom | 0.8 | 8 % | 14 % |
1)Calculate the expected return of Stock 1. Express your answer as %.
2)Calculate the expected return of Stock 2. Express your answer as %.
3)What is the expected return of a portfolio invested 40% in Stock 1 and 60% in Stock 2? Express your answer as %.
4)What is the standard deviation of a return on a portfolio invested 40% in Stock 1 and 60% in Stock 2? Express your answer as %.
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