Question
State of Economy Probability of State of Economy Return Stock A Return Stock B Return Stock C Boom 0.20 21.81% 22.79% 24.57% Good 0.35 13.21%
| State of Economy | Probability of State of Economy | Return Stock A | Return Stock B | Return Stock C |
| Boom | 0.20 | 21.81% | 22.79% | 24.57% |
| Good | 0.35 | 13.21% | 14.51% | 14.52% |
| Poor | 0.40 | 5.11% | 6.2% | 3.65% |
| Bust | 0.05 | 2.08% | 1.52% | 2.68% |
Your portfolio is invested 20% each in stock A and C and the remaining in stock B. What is the expected return of the portfolio?
NOTE: Enter the PERCENTAGE number rounding to two decimals. If your decimal answer is 0.034576, your answer must be 3.46. DO NOT USE the % sign
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Corporate Finance Core Principles and Applications
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
5th edition
1259289907, 978-1259289903
