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Use the following information to answer question 18-21. State Boom Normal Bust Probability 0.3 0.6 0.1 Return on A 12% 8% 4% Return on B
Use the following information to answer question 18-21. State Boom Normal Bust Probability 0.3 0.6 0.1 Return on A 12% 8% 4% Return on B -2% 2% 6% 18. What is the expected return on asset A? A) B) C) D) E) 1.2% 4.0% 8.00% 8.8% 9.3% What is the standard deviation of return for asset B? A) B) C) D) E) 19. 1.3% 1.9% 2.5% 2.4% 6.4% what is the expected return on a portfolio that is 60% invested in A, and 40% invested in B? A) 2.2% B) 4.4% C) 5.8% D) 8.8% E) 9.9% 20, 21. What is the standard deviation of a portfolio that is 60% invested in A, and 40% invested in B? A) B) C) D) E) 0.5% 0.9% 1.5% 2.3% 6.4%
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