Question
In: Finance
kevin is expecting either a recession or steady growth next year. Recession has a 15% probability...
kevin is expecting either a recession or steady growth next year.
Recession has a 15% probability of happening. In steady growth,
stock ABC returns 13.25% and stock XYZ returns 10.25%. In a
recession, stock ABC returns -6.70% and stock XYZ returns -4.50%.
You are going to put together a portfolio of these two stocks with
positive portfolio weight in each and allocate 65% of the portfolio
to ABC with the remainder to XYZ. What is the variance of the
portfolio?
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jeff jeffy answered 1 year agoRelated Solutions
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