Question
What is the expected return of an equally weighted portfolio comprised of the following three stocks? State of Economy Probability of State of Economy Rate
What is the expected return of an equally weighted portfolio comprised of the following three stocks?
| State of Economy | Probability of State of Economy | Rate of Return if State Occurs |
| |||||||||
|
|
| Stock A | Stock B | Stock C |
| |||||||
| Boom | .25 |
| .19 |
|
| .13 |
|
| .07 |
| ||
| Normal | .72 |
| .15 |
|
| .05 |
|
| .13 |
| ||
| Bust | .03 | .29 |
| .14 |
|
| .22 |
| ||||
| A. | 9.82 percent | |
| B. | 9.48 percent | |
| C. | 10.96 percent | |
| D. | 10.37 percent |
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The Arab World Facing The Challenge Of The New Millennium
Authors: Henry T. Azzam
1st Edition
1860648169,0857710494
