Question
Returns and Standard Deviations - Consider the following information: State of Economy Probability of State of Economy Rate of Return If State Occurs Stock A
Returns and Standard Deviations - Consider the following information:
| State of Economy | Probability of State of Economy | Rate of Return If State Occurs | ||
|---|---|---|---|---|
| Stock A | Stock B | Stock C | ||
| Boom | .10 | .35 | .45 | .27 |
| Good | .60 | .16 | .10 | .08 |
| Poor | .25 | .01 | .06 | .04 |
| Bust | .05 | .12 | .20 | .09 |
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Your portfolio is invested 30 percent each in A and C, and 40 percent in B. What is the expected return of the portfolio?
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What is the variance of this portfolio? The standard deviation?
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Principles Of Public Finance
Authors: Toshihiro Ihori
1st Edition
9811023883, 978-9811023880
