Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Please dont give long explanations, I really need the answer as soon as possible. Thank you so much The Jones Company is looking to make

image text in transcribed

Please dont give long explanations, I really need the answer as soon as possible. Thank you so muchimage text in transcribed

The Jones Company is looking to make an investment in some shares to diversify their portfolio. They are interested in the following two stocks and have been able to determine their expected returns based on the expected different states of the economy. State of Economy Probability ABC Company Expected Return XYZ Company Expected Return Very Poor 0.3 -15% -9% Poor 0.4 -5% -2% Good 0.1 14% 12% Very Good 34% 32% A) Calculate the expected return of ABC Company. (2 Mark) Please answer as a decimal to 3 decimal places. Answer: B) Calculate the expected return of XYZ Company. (1 Mark) Please answer as a decimal to 3 decimal places. Answer: Note: This question does not relate to the information above. C) If the expected return for DEF Company was 20% and for JKL Company was 13% and your portfolio was made up of DEF and JKL Shares only, what would be the expected return of the portfolio if 30% was invested in DEF? (1 Marks) Please answer as a decimal to 3 decimal places

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions