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Question 5 Calculate the variance of a portfolio assuming an equal weight in shares and bonds. A) 0.0044 B) 0.0067 C) 0.0054 D) 0.0045 E)
Question 5 Calculate the variance of a portfolio assuming an equal weight in shares and bonds. A) 0.0044 B) 0.0067 C) 0.0054 D) 0.0045 E) 0.0045 Correct answer is C. You have been provided with the below information related to potential returns on bonds and shares under different economic conditions. Scenario Return.on.Bonds Boom Positive Growth Normal Growth Negative Growth Recession Probability 6% 17% 43% 20% 10% Return.on.Shares 44% 17% 4% 2% -8% -17% 9% 6% 4% 1% 0% -2% Crash 4%
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