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There are three securities in the market. The following chart shows their possible payoffs: State Probability of Outcome Return on Security 1 Return on Security

There are three securities in the market. The following chart shows their possible payoffs:

State Probability of Outcome Return on Security 1 Return on Security 2 Return on Security 3
1 .15 .195 .195 .045
2 .35 .145 .095 .095
3 .35 .095 .145 .145
4 .15 .045 .045 .195

a-1. What is the expected return of each security? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

Expected return
Security 1 %
Security 2 %
Security 3 %

a-2. What is the standard deviation of each security? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

Standard deviation
Security 1 %
Security 2 %
Security 3 %

b-1. What are the covariances between the pairs of securities? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 5 decimal places, e.g., 32.16161.)

Covariance
Security 1 & 2
Security 1 & 3
Security 2 & 3

b-2. What are the correlations between the pairs of securities? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.)

Correlation
Security 1 & 2
Security 1 & 3
Security 2 & 3

c-1. What is the expected return of a portfolio with half of its funds invested in Security 1 and half in Security 2? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Expected return
Security 1 & 2 %

c-2. What is the standard deviation of a portfolio with half of its funds invested in Security 1 and half in Security 2? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Standard deviation
Security 1 & 2 %

d-1. What is the expected return of a portfolio with half of its funds invested in Security 1 and half in Security 3? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Expected return
Security 1 & 3 %

d-2. What is the standard deviation of a portfolio with half of its funds invested in Security 1 and half in Security 3? (Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Standard deviation
Security 1 & 3 %

e-1. What is the expected return of a portfolio with half of its funds invested in Security 2 and half in Security 3? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Expected return
Security 2 & 3 %

e-2. What is the standard deviation of a portfolio with half of its funds invested in Security 2 and half in Security 3? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Standard deviation
Security 2 & 3 %

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