FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please show all work! 8. (3 points) Consider the following information State of Economy Boom Good Poor Bust Probability of State of Economy .15 .55

image text in transcribed

Please show all work!

8. (3 points) Consider the following information State of Economy Boom Good Poor Bust Probability of State of Economy .15 .55 25 05 Rate of Return If State Occurs Stock B 45 .10 .06 -,20 Stock A 35 Stock C 27 08 .04 .09 -.01 -.12 a) Your portfolio is invested 40 percent each in A and C, and 20 percent in B. What is the expected return of the portfolio? (1 point) b) What is the variance of this portfolio? The standard deviation? (2 points)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Recommended Textbook for

Clarence Dillon A Wall Street Enigma

Clarence Dillon A Wall Street Enigma

Authors: Robert C. Perez , Edward F. Willett

1st Edition

1568330480

More Books

Students also viewed these Finance questions

Question

★★★★★
The unadjusted trial balance of Epicenter Laundry at June 30, 2014, the end of the current fiscal year, is shown below. The data needed to determine year-end adjustments are as follows: a. Laundry...

Answered: 1 week ago

Question

★★★★★
5. What are the three main reasons why possessions take on special meaning? Some offerings have symbolic meaning. Consumers use some products as conscious or unconscious badges that designate the...

Answered: 1 week ago

Question

★★★★★
6. Explain the basis for Six Sigma

Answered: 1 week ago

Question

★★★★★
Identify the type of fraud being committed and explain your reasons. In 1997, Bill Eaves worked in the purchasing department of Mavis County. In 2000, Eaves was promoted to assistant county...

Answered: 1 week ago

Question

★★★★★
What is the price of the bond if the required rate of return is 5.6% AND the coupons are paid semi- annually, par value $1000, if it matures in 3 years? The answer is 1010.91 Please show work, thank...

Answered: 1 week ago

Question

★★★★★
Statistic 3. Following data was gathered: Unemployed Employed Men 206 412 Women 386 305 Find: a. P(U) b. P(UM) c. P(M and E) d. P(W or U) e. Are events "M" and "E" independent? 4. Two cards are...

Answered: 1 week ago

Question

★★★★★
1. A company sold fans at shs 2,000 each. Variable cost shs. 1,200 each and fixed cost shs. 610,000. Calculate: a. Calculate break even sales in sh. b. Break even sales in units. c. Sales in units to...

Answered: 1 week ago

Question

★★★★★
Meghan is analyzing how prices for consumer goods and services changed over a range of years. According to this line chart, when did the Consumer Price Index fall to 1 8 5 ?

Answered: 1 week ago

Question

★★★★★
Inflation is 2% per year; the interest rate is 8% per year. Your perpetuity project has cash flows that grow at 1% faster than inflation forever, starting with $20 next year. What is the correct...

Answered: 1 week ago

Question

★★★★★
Assume stock ABC has a Sharpe ratio of 0.8. Let's say there is a portfolio with 50% weight in stock ABC and 50% weight in risk-free asset, what is the portfolio's Sharpe ratio based on this...

Answered: 1 week ago

Question

★★★★★
1. If the present value of $280 paid one year from now is $250, what is the one- year discount factor? *Make sure to input all currency answers without any currency symbols or commas, and use two...

Answered: 1 week ago

Previous Question Next Question