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Question 1: By using the excel spreadsheet, compute the expected return and standard deviation of the returns on a portfolio that is invested in stocks

Question 1:

By using the excel spreadsheet, compute the expected return and standard deviation of the returns on a portfolio that is invested in stocks A, B, and C? The total amount you invested in the portfolio is $95,000, where $33,000 of this amount of money is invested in stock A and $20,000 is invested in stock B, the rest were invested in stock C.

State of Economy

Probability of state of Economy

Return if state Occurs

Stock A

Stock B

Stock C

Boom

10%

17%

6%

22%

Normal

30%

8%

10%

15%

Recession

60%

-3%

19%

-25%

Note: (You must show all steps in finding the Standard Deviation)

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