Question
In: Finance
You are expecting either a recession or steady growth next year. Recession has a 25% probability...
You are expecting either a recession or steady growth next year. Recession has a 25% probability of happening. In steady growth, stock ABC returns 12.00% and stock XYZ returns 9.00%. In a recession, stock ABC returns -6.20% and stock XYZ returns -4.00%. You are going to put together a portfolio of these two stocks with positive portfolio weight in each and allocate 55% of the portfolio to ABC with the remainder to XYZ. What is the variance of the portfolio?
Question 1 options:
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0.00448 |
|
|
0.00460 |
|
|
0.00472 |
|
|
0.00483 |
|
|
0.00495 |
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Expert Solution
Ans is 0.00472
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jeff jeffy answered 1 year agoRelated Solutions
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