Question
What is the expected standard deviation of stock As returns based on the information presented in the table? Answer as a rate in decimal format
What is the expected standard deviation of stock A’s returns based on the information presented in the table? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098. Note that figures in the table are presented in decimal format, not as percentages.
Outcome | Probability of outcome | Stock A return in outcome |
Good | 0.3 | 0.4 |
Medium | 0.4 | 0.1 |
Bad | ? | -0.4 |
Rogelio’s portfolio is worth 73,600 dollars and has three stocks. It has 12,300 dollars of stock A, which has an expected return of 4.95 percent; it has 2,000 shares of stock B, which has a share price of 8 dollars and an expected return of 9.12 percent; and it has some stock C, which has an expected return of 16.58 percent. What is the expected return of Rogelio’s portfolio? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.
|
Step by Step Solution
3.44 Rating (151 Votes )
There are 3 Steps involved in it
Step: 1
The expected standard deviation of stock As returns is 03137 Here are the steps to calculate the exp...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started