Question
Question 2 3 points: You are forming a portfolio consisting of three stocks. You invest 25% in Stock A, 50% in Stock B and 25%
Question 2 3 points:
You are forming a portfolio consisting of three stocks. You invest 25% in Stock A, 50% in Stock B and 25% in Stock C. States, probabilities and returns are given in the table below:
| State | Probability | Stock As return | Stock Bs return | Stock Cs return |
| Boom | 30% | 50% | 20% | 10% |
| Normal | 60% | 20% | 15% | 20% |
| Recession | 10% | 10% | 5% | 40% |
A. Calculate the expected return on your portfolio. Show details of your calculations below. You may copy and paste a table from Excel below.
B. Calculate the variance and standard deviation of your portfolio. Show details of your calculations below. You may copy and paste a table from Excel below.
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Managerial Accounting
Authors: Ray Garrison, Eric Noreen, Peter Brewer
17th Edition
1260247783, 978-1260247787
