Question
You decide to invest in a portfolio consisting of 24 percent Stock X, 45 percent Stock Y, and the remainder in Stock Z. Based on
You decide to invest in a portfolio consisting of 24 percent Stock X, 45 percent Stock Y, and the remainder in Stock Z. Based on the following information, what is the standard deviation of your portfolio?
| State of Economy | Probability of State | Return if State Occurs | ||||||||||
| of Economy | ||||||||||||
| Stock X | Stock Y | Stock Z | ||||||||||
| Normal | .78 | 9.90% | 3.30% | 12.30% | ||||||||
| Boom | .22 | 17.20% | 25.20% | 16.70% | ||||||||
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International Financial Reporting A Practical Guide
Authors: Alan Melville
6th edition
1292200743, 1292200766, 9781292200767, 978-1292200743
