Question

In: Finance

Suppose the risk-free rate is 3%. Calculate the variance of a portfolio that has $3,000 in Stock B, $4,000 in Stock C, and $5,000 in the risk-free asset.

You have the following information:

Economy State           Probability   Stock A           Stock B           Stock C
Good                           .4                                14%                 10%                 22%
Neutral     .23                               0%                   1%                  14%
Bad                             .37                               -3%                  -9%                 -34%

Suppose the risk-free rate is 3%. Calculate the variance of a portfolio that has $3,000 in Stock B, $4,000 in Stock C, and $5,000 in the risk-free asset.

0.012883

0.011243

0.011250

0.012941

None of the above.

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jeff jeffy answered 1 year ago
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