Question
Rate of Return if State Occurs State of Economy Probability of State of Economy Stock A Stock B Stock C Boom .10 .18 .48 .33
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| Rate of Return if State Occurs | ||
| State of Economy | Probability of State of Economy | Stock A | Stock B | Stock C |
| Boom | .10 | .18 | .48 | .33 |
| Good | .300 | .11 | .18 | .15 |
| Poor | .40 | .05 | -.09 | -.05 |
| Burst | .20 | -.03 | -.32 | -.09 |
a- Your portfolio is invested 25 percent each in A and C, and 50 percent in B. What is the expected return of the portfolio?
b- What is the variance of this portfolio? The standard deviation?
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Lending Investments And The Financial Crisis
Authors: Elena Beccalli, Federica Poli
1st Edition
1349564982, 978-1349564989
