Question
Suppose you have $20,000 total. If you put $14,000 in Stock A and the remainder in Stock B, what will be the expected return on
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Suppose you have $20,000 total. If you put $14,000 in Stock A and the remainder in Stock B, what will be the expected return on your portfolio?
State of Economy
Probability
Return on A
Return on B
Recession
0.2
-20%
30%
Normal
0.5
10%
20%
Boom
0.3
70%
50%
a. 24.70%
b. 28.50%
c. 14.50%
d. 10.90%
Suppose you have $20,000 total. If you put $14,000 in Stock A and the remainder in Stock B, what will be the expected return on your portfolio?
| State of Economy | Probability | Return on A | Return on B |
| Recession | 0.2 | -20% | 30% |
| Normal | 0.5 | 10% | 20% |
| Boom | 0.3 | 70% | 50% |
| a. | 24.70% |
| b. | 28.50% |
| c. | 14.50% |
| d. | 10.90% |
QUESTION 8
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Following Question 7, what will be the standard deviation on your portfolio?
a. 18.01%
b. 20.75%
c. 24.32%
d. 26.61%
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Calculus
Authors: Dale Varberg, Edwin J. Purcell, Steven E. Rigdon
9th edition
131429248, 978-0131429246
