Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The following table presents forecasted returns for three companies under various potential states of the economy: State Probability Stock X Stock Y Stock Z Above
The following table presents forecasted returns for three companies under various potential states of the economy:
State | Probability | Stock X | Stock Y | Stock Z |
Above Average | 10% | 38.3% | 27.1% | 43.2% |
Average | 45% | 16.7% | 5.5% | 12.0% |
Below Average | 30% | -2.5% | -4.0% | -7.0% |
Recession | 15% | -10.9% | -6.0% | -15.6% |
Weight | 55% | 30% | 15% |
What is the standard deviation on a portfolio of these three companies constructed according to the weights given in the table? (Report answer in percentage terms and round to 2 decimal places. Do not round intermediate calculations).
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