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State of Economy Probability of State of Economy Stock A Stock B TSX Boom .30 30% -9% 18% Normal .40 16% 12% 10% Recession .30
|
State of Economy | Probability of State of Economy |
Stock A |
Stock B |
TSX |
| Boom | .30 | 30% | -9% | 18% |
| Normal | .40 | 16% | 12% | 10% |
| Recession | .30 | -10% | 20% | -10% |
- Calculate the covariance and correlation of the returns for stock B and the TSX.
- Calculate the beta of Stock A.
- Calculate the beta of stock B.
- Calculate the beta for the TSX.
- Using an excel spreadsheet and the calculations you have done above, prepare a spreadsheet that provides the expected returns and the risk for a portfolio that invests in stock A and stock B. Prepare the calculations using 4% increments in the weights.
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Agricultural Finance
Authors: Charles Moss
1st Edition
0415599075, 978-0415599078
