{ "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>

  1. Calculate the optimal % of investment (weight) in stock A and stock B, if we want to make zero risk portfolio.<\/li><\/ol>", "transcribed_text": "", "related_book": { "title": "Microeconomics An Intuitive Approach with Calculus", "isbn": "538453257, 978-0538453257", "edition": "1st edition", "authors": "Thomas Nechyba", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/643.jpg", "uri": "\/textbooks\/microeconomics-an-intuitive-approach-with-calculus-1st-edition-643", "see_more_uri": "\/textbooks\/business-auditing-financial-auditing-3474" }, "free_related_book": { "isbn": "0387569448", "uri": "\/textbooks\/ramanujans-lost-notebook-part-ii-1st-edition-978-0387569444-272163", "name": "Ramanujans Lost Notebook Part Ii", "edition": "1st Edition" }, "question_posted": "2024-06-05 12:13:26", "see_more_questions_link": "\/study-help\/questions\/business-accounting-2024-September-20", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/the-coach-told-the-high-school-swim-team-that-times", "description": "The coach told the high school swim team that times in the 200-yard individual medley in the Division I-AA Swim Championships typically are more than 1\/2 second faster than their seed times going...", "stars": 3 }, { "url": "\/study-help\/auditing-assurance-services\/according-to-the-canadian-organic-food-standards-the-organic-label-816963", "description": "According to the Canadian Organic Food Standards, the ?organic? label can only be placed on apples that are grown without the use of chemical pesticides. 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