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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 Stock A
Use the following information to answer the two questions below. State of Prob. of the Rate of return if state occurs the economy Stock A Stock B state of economy Boom 0.40 0.15 0.05 Bust 0.60 -0.05 0.05 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 the %. 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 75% in asset A and 25% in Asset B? What is the variance of the portfolio with 75% in asset A and 25% in Asset B
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