Question
Problem 2 and 3 of lesson 11 assignment (Please show me the steps) Problem 2 There is a 38.80% probability of an average economy and
Problem 2 and 3 of lesson 11 assignment
(Please show me the steps)
Problem 2
There is a 38.80% probability of an average economy and a 61.20% probability of an above average economy. You invest 43.20% of your money in Stock S and 56.80% of your money in Stock T. In an average economy the expected returns for Stock S and Stock T are 6.10% and 13.40%, respectively. In an above average economy the the expected returns for Stock S and T are 18.20% and 15.70%, respectively. What is the expected return for this two stock portfolio? (2 points)
Problem 3
You are invested 24.00% in growth stocks with a beta of 1.67, 37.80% in value stocks with a beta of 1.19, and 38.20% in the market portfolio. What is the beta of your portfolio? (1 point)
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