Q1:

Q2:

Consider an economy with two types of firms, S and I. S firms always move together, but I firms move independently of each other. For both types of firms there is a 40% probability that the firm will have a 20% return and a 60% probability that the firm will have a30% return.

What is the expected return for an individual firm?

Q3:

A portfolio has three stocks 200 shares of Yahoo (YHOO),100 shares of General Motors (GM), and 70 shares of Standard and Poor's Index Fund (SPY). If the price of YHOO is $30, the price of GM is $30, and the price of SPY is $130, calculate the portfolio weight of YHOO and GM.

Q4:

Ford Motor Company had realized returns of 15%, 25%, 25%, and 15% over four quarters. What is the quarterly standard deviation of returns for Ford calculated from this sample? A. OB, C. OD, 606% 4.62% 5.77% 52%