Question
In: Finance
You are expecting either a recession or steady growth next year. Recession has a 29% probability...
You are expecting either a recession or steady growth next year. Recession has a 29% probability of happening. In steady growth, stock ABC returns 11.50% and stock XYZ returns 8.50%. In a recession, stock ABC returns -6.00% and stock XYZ returns -3.80%. You are going to put together a portfolio of these two stocks with positive portfolio weight in each and allocate 51% of the portfolio to ABC with the remainder to XYZ. What is the variance of the portfolio?
|
0.00449 |
|
|
0.00460 |
|
|
0.00472 |
|
|
0.00483 |
|
|
0.00495 |
Solutions
jeff jeffy answered 1 year agoRelated Solutions
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