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You have a portfolio which is comprised of 70 percent of stock A and 30 percent of stock B. What is the expected return on
- You have a portfolio which is comprised of 70 percent of stock A and 30 percent of stock B. What is the expected return on this portfolio?
| State of the Economy | Probability | E(R) A | E(R) B | ||||
| Weight |
| 60 | % | 40 | % | ||
| Boom | 0.2 | 20 | % | 15 | % | ||
| Normal | 0.6 | 12 | % | 8 | % | ||
| Recession | 0.2 | -10 | % | 3 | % | ||
|
| 7.30 percent | ||||||
|
| 7.58 percent | ||||||
|
| 8.03 percent | ||||||
|
| 8.88 percent | ||||||
|
| 9.40 percent | ||||||
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Real Estate Finance
Authors: John P. Wiedemer, Keith J. Baker
9th edition
324181426, 324181425, 978-0324181425
