Question
you have two stocks the following table shows their expected dividend and expected stock price after one year under different states. The current stock price
you have two stocks the following table shows their expected dividend and expected stock price after one year under different states. The current stock price of stock A is 24, and the current stock price of stock B is 18.
Please calculate the expected rate of return and standard deviation of a portfolio that half invested in stock A and half in Stock B. All three economic scenarios are equally likely to occur.
| Stock A | Dividend | Stock Price |
| Boom | $0 | $20 |
| Normal economy | 1 | 25 |
| Recession | 3 | 30 |
| Stock A | Dividend | Stock Price |
| Boom | $ 0 | $15 |
| Normal economy | 1 | 20 |
| Recession | 4 | 36 |
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Corporate Finance Governance And Business Cycles Theory And International Comparisons
Authors: Robert E. Krainer
1st Edition
0444510494, 9780444510495
