Question
Use the following information to solve the questions below. Suppose you have a portfolio consisting of three stocks: Stock A, Stock B, and Stock C.
Use the following information to solve the questions below. Suppose you have a portfolio consisting of three stocks: Stock A, Stock B, and Stock C. $40,000 is invested in Stock A; $35,000 is invested in Stock B; and $25,000 is invested in Stock C:
| state | probability | Stock A | Stock B | Stock C |
| boom | 0.45 | 4% | 15% | -13% |
| normal | ? | 7% | 6% | -2% |
| recession | 0.15 | 12% | -30% | 8% |
- What is the standard deviation of Stock A?
- What is the portfolio expected return?
Please do it not on an excel file. Need the work by hand
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Financial Institutions Management
Authors: Anthony Saunders
1st Edition
0256110565, 9780256110562
