{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-06-05T12:13:26-04:00", "answer_date": "2024-06-05 12:13:26", "is_docs_available": "", "is_excel_available": "", "is_pdf_available": "", "count_file_available": 0, "main_page": "student_question_view", "question_id": "2291512", "url": "\/study-help\/questions\/you-are-thinking-about-investing-your-money-in-the-stock-2291512", "question_creation_date_js": "2024-06-05T12:13:26-04:00", "question_creation_date": "Jun 05, 2024 12:13 PM", "meta_title": "[Solved] You are thinking about investing your mon | SolutionInn", "meta_description": "Answer of - You are thinking about investing your money in the stock market. You have the following two stocks in mind: stock A an | SolutionInn", "meta_keywords": "thinking,investing,money,stock,market,two,stocks,mind,economy,recession,will,boom", "question_title_h1": "You are thinking about investing your money in the stock market. You have the following two stocks in mind: stock A and stock B. You", "question_title": "You are thinking about investing your money in the stock market. You", "question_title_for_js_snippet": "You are thinking about investing your money in the stock market You have the following two stocks in mind stock A and stock B You know that either the economy can go in recession or it will boom Being an optimistic investor, you believe the likelihood of observing an economic boom is two times as high as observing an economic depression You also know the following about your two stocks State of the Economy Probability R A R B Boom 30 12 10 Normal 40 9 10 Recession 30 4 10 Calculate the optimal of investment (weight) in stock A and stock B, if we want to make zero risk portfolio ", "question_description": "
You are thinking about investing your money in the stock market. You have the following two stocks in mind: stock A and stock B. You know that either the economy can go in recession or it will boom. Being an optimistic investor, you believe the likelihood of observing an economic boom is two times as high as observing an economic depression. You also know the following about your two stocks:<\/p>
<\/p> State of the Economy<\/strong><\/p><\/td> Probability<\/strong><\/p><\/td> RA<\/sub><\/strong><\/p><\/td> RB<\/sub><\/strong><\/p><\/td> <\/tr> Boom<\/p><\/td> 30%<\/p><\/td> 12%<\/p><\/td> 10%<\/p><\/td> <\/tr> Normal<\/p><\/td> 40%<\/p><\/td> 9%<\/p><\/td> 10%<\/p><\/td> <\/tr> Recession<\/p><\/td> 30%<\/p><\/td> 4%<\/p><\/td> 10%<\/p><\/td> <\/tr> <\/tbody><\/table><\/figure>