QUESTION 4

Use the following table of states of the economy and stock returns to calculate the percentage standard deviation of a portfolio of a portfolio of 34 percent Roten and the rest in Bradley.

		Security if State	Returns Occurs
	Prob of State of Economy	Roten	Bradley
Bust	0.8	-19%	26%
Boom	?	40	5

3 points

QUESTION 5

Use the following information to calculate the percentage expected return a portfolio that is 35.1 percent invested in 3 Doors, Inc., and the rest invested in Down Co.:

	3 Dorrs, Inc.	Down Co.
Expected return	18%	6%
Standard deviation	38	6
Correlation	9

1 points

QUESTION 6

Use the following information to calculate the percentage standard deviation of a portfolio that is 38.1 percent invested in 3 Doors, Inc., and the rest invested in Down Co.:

	3 Dorrs, Inc.	Down Co.
Expected return	29%	12%
Standard deviation	52	38
Correlation	0.41