Question
You have formed a portfolio that is invested 40 percent in both Stocks A and B, and 20 percent in Stock C. Rate of Return
You have formed a portfolio that is invested 40 percent in both Stocks A and B, and 20 percent in Stock C.
Rate of Return if State Occurs:
| State of Economy | Probability of State Occurring | Stock A (%) | Stock B (%) | Stock C (%) |
| Boom | .08 | 15.8 | 9.4 | 21.2 |
| Normal | .92 | 10.6 | 6.8 | 10.4 |
A. What is the expected return on this portfolio? Show details of your calculations in the space provided below:
B. What is the variance and standard deviation of this portfolio? Show details of your calculations in the space provided below:
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Personal Finance
Authors: Jack Kapoor, Les Dlabay, Robert Hughes
10th Edition
0073530697, 9780073530697
