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Please solve these five problems with formulas and their names and steps to solve in Texas Instruments BA II Plus Professional calculator 1. An investor
Please solve these five problems with formulas and their names and steps to solve in Texas Instruments BA II Plus Professional calculator
1. An investor invests 30 percent of his wealth in a risky asset with an expected rate of return of 0.15 and a variance of 0.04 and 70 percent in a Tbill that pays 6 percent. His portfolio's expected return and standard deviation are __________ and __________, respectively. 0.114; 0.12 0.087; 0.06 0.295; 0.12 0.087; 0.12 0.795; 0.14 Consider the following probability distribution for stocks A and B to answer the 3 questions below: State Probability Return on Return on Stock A Stock B 1 0.10 10% 8% 2 0.20 13% 7% 3 0.20 12% 6% 4 0.30 14% 9% 5 0.20 15% 8% 2. The expected rates of return of stocks A and B are _____ and _____ , respectively. 13.2%; 9% 14%; 10% 13.2%; 7.7% 7.7%; 13.2% none of the above 3. The standard deviations of stocks A and B are _____ and _____, respectively. 1.5%; 1.9% 2.5%; 1.1% 3.2%; 2.0% 1.5%; 1.1% none of the above 4. The coefficient of correlation between A and B is 0.47. 0.60. 0.58 1.20. none of the above. 5. If you invest 40% of your money in A and 60% in B, what would be your portfolio's expected rate of return and standard deviation? 9.9%; 3% 9.9%; 1.1% 11%; 1.1% 11%; 3% none of the aboveStep by Step Solution
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