Question
There are two assets and three states of the economy: State of Economy Probability of State of Economy Rate of Return If State Occurs Stock
There are two assets and three states of the economy:
| State of Economy | Probability of State of Economy | Rate of Return If State Occurs | |
| Stock A | Stock B | ||
| Recession | .30 | -.20 | .10 |
| Normal | .50 | .40 | .30 |
| Boom | .20 | .80 | .50 |
Suppose you have $20,000 total. If you put $15,000 in Stock A and the remainder in Stock B, what will be the standard deviation of your portfolio? (Keep 2 post decimal digits in your final answer)
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Global Finance
Authors: Robert Holton
1st Edition
0415619165, 978-0415619165
