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Use the following information to answer the two questions below. State of Prob. of the Rate of return if state occurs the economy state of
Use the following information to answer the two questions below. State of Prob. of the Rate of return if state occurs the economy state of economy Stock A Stock B Boom 0.75 15% 4% Bust 0.25 5% 4% You MUST use 4 digits in every calculation you do in order for your answer to be the same as the one in the system. Enter answer using 4 decimals. Do not use or enter in %. For example, if your answer is 3.48% enter 0.035; if your answer is 0.12013 then enter 0.1201 What is the expected return of a portfolio with 80% in asset A and 20% in Asset B? What is the standard deviation of the portfolio with 80% in asset A and 20% in Asset B? AJ
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