Question

In: Finance

Your portfolio is invested 26 percent each in A and C, and 48 percent in B. What is the expected return of the portfolio?

Consider the following information:

     

Rate of Return if State Occurs
State of Economy Probability of
State of Economy		 Stock A Stock B Stock C
Boom .20   .36   .46   .26
Good .55   .20   .17   .11
Poor .20 –.04 –.07 –.06
Bust .05 –.14 –.32 –.09

      

Requirement 1:

Your portfolio is invested 26 percent each in A and C, and 48 percent in B. What is the expected return of the portfolio? (Do not round your intermediate calculations.)
  (Click to select)   10.90%   21.00%   28.30%   17.80%   14.30%

   

Requirement 2:
(a) What is the variance of this portfolio? (Do not round your intermediate calculations.)
  (Click to select)   2.3262   -.7738   1.2262   .6262   .0262

  

(b) What is the standard deviation? (Do not round your intermediate calculations.)
  (Click to select)   13.88%   16.18%   18.38%   20.58%   12.88%

Solutions

Expert Solution

 

jeff jeffy answered 3 years ago
Next > < Previous

Related Solutions

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? 
If your portfolio is invested 40 percent each in A and B and 20 percent in C, what is the portfolio expected return? The variance? The standard deviation?
Consider the following information about three stocks: State of Economy Probability of State of Economy Rate of Return If State Occurs Stock A Stock B Stock C Boom .25 .21 .36 .55 Normal .60 .17 .13 .09 Bust .15 .00 −.28 −.45 If your portfolio is invested 40 percent each in A and B and 20 percent in C, what is the portfolio expected return? The variance? The standard deviation? If the expected T-bill rate is 3.80 percent, what is...
Your portfolio is invested 20 percent each in A and C, and 60 percent in B....
Your portfolio is invested 20 percent each in A and C, and 60 percent in B. What is the standard deviation of the portfolio? Rate of Return if State Occurs State of Economy Probability of State of Economy Stock A Stock B Stock C Boom .15 .37 .47 .27 Good .45 .22 .18 .11 Poor .35 -.18 -.22 -.08 Bust .05 -.04 -.07 -.05 29.78% 21.36% 25.63% 10.96% 17.26%
The expected return and standard deviation of a portfolio that is 70 percent invested in 3...
The expected return and standard deviation of a portfolio that is 70 percent invested in 3 Doors, Inc., and 30 percent invested in Down Co. are the following: 3 Doors, Inc. Down Co.   Expected return, E(R) 12 % 10 %   Standard deviation, σ 45 34 What is the standard deviation if the correlation is +1? 0? −1?
The expected return and standard deviation of a portfolio that is 50 percent invested in 3...
The expected return and standard deviation of a portfolio that is 50 percent invested in 3 Doors, Inc.,and 50 percent invested in Down Co. are the following: 3 Doors, Inc. Down Co. Expected return, E(R) 14 % 10 % Standard deviation, σ 42 31 What is the standard deviation if the correlation is +1? 0? −1?
The expected return and standard deviation of a portfolio that is 50 percent invested in 3...
The expected return and standard deviation of a portfolio that is 50 percent invested in 3 Doors, Inc., and 50 percent invested in Down Co. are the following: 3 Doors, Inc. Down Co. Expected return, E(R) 14 % 11 % Standard deviation, σ 47 36 What is the standard deviation if the correlation is +1? 0? −1? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)...
The expected return and standard deviation of a portfolio that is 40 percent invested in 3...
The expected return and standard deviation of a portfolio that is 40 percent invested in 3 Doors, Inc., and 60 percent invested in Down Co. are the following: 3 Doors, Inc. Down Co. Expected return, E(R) 15 % 11 % Standard deviation, σ 48 37 What is the standard deviation if the correlation is +1? 0? −1? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. ) Standard Deviation Correlation +1 % Correlation...
The expected return and standard deviation of a portfolio that is 40 percent invested in 3...
The expected return and standard deviation of a portfolio that is 40 percent invested in 3 Doors, Inc., and 60 percent invested in Down Co. are the following: 3 Doors, Inc. Down Co. Expected return, E(R) 15 % 14 % Standard deviation, σ 58 32 What is the standard deviation if the correlation is +1? 0? −1? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. )
What is the expected return of a portfolio that has invested $14,744 in Stock A, $9,716 in Stock B, and $16,880 in Stock C?
Consider the following information:State Probability Stock A Stock B Stock CBoom 0.32 -0.09 0.17 0.18Bust 0.68 -0.07 0.04 -0.02What is the expected return of a portfolio that has invested $14,744 in Stock A, $9,716 in Stock B, and $16,880 in Stock C? (Hint: calculate weights of each stock first). Enter the answer with 4 decimals (e.g. 0.1234).
What is the expected return of a portfolio that has invested $17,553 in Stock A, $19,931 in Stock B, and $3,294 in Stock C?
Consider the following information: State Probability Stock A Stock B Stock C Boom 0.32 -0.04 0.13 0.18 Bust 0.68 -0.06 0.1 -0.06 What is the expected return of a portfolio that has invested $17,553 in Stock A, $19,931 in Stock B, and $3,294 in Stock C? (Hint: calculate weights of each stock first). Enter the answer with 4 decimals (e.g. 0.1234).
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT