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Portfolio Worksheet Consider the following Returns Sc enaridProbability Auto Gold Portfolio (75% auto, 25% gold) Recessior1/3 Normal Boom 1/3 1/3 -8- .5 .18 ' +20
Portfolio Worksheet Consider the following Returns Sc enaridProbability Auto Gold Portfolio (75% auto, 25% gold) Recessior1/3 Normal Boom 1/3 1/3 -8- .5 .18 ' +20 +3 -20 .75(-8) + .25 (20)--10% .75(5) + .25 (3)-+4.5% .75(18) + .25 (-20) +8.5% Expected Return Auto (-845+18)/3-5% Gold (+20+3-20)/3-196 Portfolio (-1 +4.5+8.5)/3 4% Variance Auto (169+0+169)/3-1 12.7 (std. 10.6%) Gold (361 +4+441)/3-2687 (std. 16.4%) Portfolio (25+.25 +20.25)/3-152 (std 3.996) 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
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