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Use the following return distributions for the two funds for the next 4 questions. Business Conditions Probability Return on Stock Fund Return on Bond Fund
Use the following return distributions for the two funds for the next questions.
Business Conditions
Probability
Return on Stock Fund
Return on Bond Fund
Boom
Normal
Recession
How much is the expected return on the stock fund?
How much is the standard deviation of the return on the stock fund?
Assume that of your $ portfolio, you invest $ in Stock fund and the rest $ in Bond fund. What is the expected return on your portfolio?
What is the standard deviation of the above portfolio?
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