Question

In: Finance

Your portfolio is invested 25% each in A and C, and 50 percent in B. What is the expected return of the portfolio?

Consider the following information:

 

State of Economy

Probability of State of Economy

Stock A

Stock B

Stock C

Boom

.05

0.55

0.60

0.47

Good

.15

0.46

0.25

0.28

Poor

.35

-0.01

-0.06

-0.04

Bust

.45

-0.12

-0.10

-0.09

 

a.    Your portfolio is invested 25% each in A and C, and 50 percent in B. What is the expected return of the portfolio?  

b.        What is the variance of this portfolio? The standard deviation? 

Solutions

Expert Solution

jeff jeffy answered 2 years ago
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