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 2 years ago
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