Question
The table below shows the expected rates of return for three stocks and their weights in some portfolio: Stock A Stock B Stock C Portfolio
The table below shows the expected rates of return for three stocks and their weights in some portfolio:
| Stock A | Stock B | Stock C | ||
| Portfolio weights | 0.4 | 0.2 | 0.4 | |
| State | Probability | Expected returns | ||
| Recession | 0.1 | 0.09 | 0.03 | 0.12 |
| Boom | 0.9 | 0.14 | 0.05 | 0.13 |
Part 3
What is the standard deviation of the portfolio returns?
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Managerial Accounting Tools for Business Decision Making
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
7th edition
978-1118334331, 1118334337, 978-1119036449, 1119036445, 978-1119036432
