Question
The following details are available on these two stocks: Economic Condition Probability(P) HPR- Stock A HPR- Stock BBoom 0.30 30% _-40%Normal(Average) 0.50 20% 15%Recession 0.20
The following details are available on these two stocks: Economic Condition Probability(P) HPR- Stock A HPR- Stock BBoom 0.30 30% _-40%Normal(Average) 0.50 20% 15%Recession 0.20 -10% 25%P Mudala has K2000000 available for investment. He intends to invest 75% in stock A and the rest in Stock B. 5 REQUIRED: i. Calculate the Expected Return (ER) or mean for each asset in the portfolio (2marks) ii. The risk or standard deviation of asset in the portfolio ( 3 marks) iii. The Co-efficient of variation (CV ) of each asset in the portfolio (2 marks) iv.Expected return of the portfolio (Erp) (3 marks)
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