Question
Richard must decide how to allocate the capital in his portfolio. Richard has $56,000 available to invest. He finds the rates of return for four
Richard must decide how to allocate the capital in his portfolio. Richard has $56,000 available to invest. He finds the rates of return for four stocks for the past 12 years and the results are given below. Richard plans to invest 25% of his funds in each stock.
a) How much will he invest in each stock?)
b) The expected value of Richard's porfolio is: (Round your answer to one one-hundreth of a percent)
c) The standard deviation of Richard's portfolio is: (Round your answer to one one-hundredth of a percent)
Year Stock A (%) Stock B (%) Stock C (%) Stock D (%)
1 | -5.450 | -16.720 | 5.290 | -2.240 |
2 | 7.960 | 23.510 | -5.438 | 4.465 |
3 | 12.300 | 36.530 | -8.910 | 6.635 |
4 | 14.300 | 42.530 | -10.510 | 7.635 |
5 | -16.350 | -49.420 | 14.010 | -7.690 |
6 | 16.070 | 47.840 | -11.926 | 8.520 |
7 | 4.470 | 13.040 | -2.646 | 2.720 |
8 | 13.210 | 39.260 | -9.638 | 7.090 |
9 | 8.750 | 25.880 | -6.070 | 4.860 |
10 | 8.960 | 26.510 | -6.238 | 4.965 |
11 | -5.290 | -16.240 | 5.162 | -2.160 |
12 | -8.350 | -25.420 | 7.610 | -3.690 |
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