Portfolio Worksheet Consider the following: Returns Auto Gold Scenario Probability Portfolio (75% auto, 25% gold) Recession 1/3 1/3 1/3 -8;:+20 +5/ / +3 +18-20 .75(8) + .25 (20) =-10% .75(5) + .25 (3)-+4.5% 75(18) + .25 (-20) 8.5% Expected Return Auto Gold (+20+3-20)/3 = 1% Portfolio (-1+4.5+8.5)/3 = 4% (-8+5+18)/3 5% variance (169+0. 169y3-112.7 (std. 10.6%) (361 +4+441)/3-2687 (std. 16.4%) (25+25 +20.25)/3: 15.2 (std 3.9%) Gold Portfolio Homework: 1) Show expected return & variance of a 90% auto, 10% gold portfolio 2) Show expected return & variance of a 25% auto 75% gold portfolio