Question
There are two assets and three states of the economy, answer questions 11 to 15. State of Economy Probability of State of Economy Return of
There are two assets and three states of the economy, answer questions 11 to 15.
| State of Economy | Probability of State of Economy | Return of Stock A if State Occurs | Return of Stock B if State Occurs |
| Recession | 0.30 | -0.20 | 0.10 |
| Normal | ? | 0.30 | 0.20 |
| Boom | 0.15 | 0.40 | 0.30 |
- What is the expected return for Stock A?
- What is the standard deviation for Stock A?
- Suppose you have $50,000 total. If you put $20,000 in Stock A and the remainder in Stock B, what are the portfolio returns in each state?
- Suppose you have $50,000 total. If you put $20,000 in Stock A and the remainder in Stock B, what will be the expected return of your portfolio?
- Suppose you have $50,000 total. If you put $20,000 in Stock A and the remainder in Stock B, what will be the standard deviation of your portfolio?
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Foreign Direct Investment Smart Approaches To Differentiation And Engagement
Authors: Daniel Nicholls
1st Edition
1409423573,1409471381
