Question
You are now making $250,000 annual salary and are looking to begin investing your money. You are looking to start investing $20,000 in the stock
You are now making $250,000 annual salary and are looking to begin investing your money. You are looking to start investing $20,000 in the stock markets.
After careful analysis you decide to invest $6,000 in Apple and $14,000 in Facebook stock. You further analyzed the state of the economy and put together the table below.
State of Economy | Probability | Apple return based on Economy | Facebook return based on Economy |
Recession | 10% | -20% | 30% |
Normal | 60% | 10% | 20% |
Boom | 30% | 70% | 50% |
Based on your analysis what is the expected return, and standard deviation of your portfolio?
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