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Security Returns If State Occurs State of Probability of Economy State of Economy Roll Ross Bust .40 10 % 21 % Boom .60 28 8
Security Returns If State Occurs | |||||||||||
State of | Probability of | ||||||||||
Economy | State of Economy | Roll | Ross | ||||||||
Bust | .40 | 10 | % | 21 | % | ||||||
Boom | .60 | 28 | 8 | ||||||||
Calculate the volatility of a portfolio of 35 percent Roll and 65 percent Ross by filling in the following table:(Round your standard deviation answer to 2 decimal places. Round your intermediate calculations and other answers to 4 decimal places. Omit the "%" sign in your response.) |
Calculating Portfolio Variance | ||||||||||||
State of Economy | Probability of State of Economy | Portfolio Return If State Occurs | Squared Deviation from Expected Return | Product | ||||||||
Bust | .40 | |||||||||||
Boom | .60 | |||||||||||
p2 = | ||||||||||||
= | % | |||||||||||
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