a. What is the expected return on an equally weighted portfolio of these three stocks? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Expected return b. What is the variance of a portfolio invested 25% each in A and B and 50% in C? (Do not round intermediate calculations, Round the final answer to 6 decimal places.) Variance

MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
icon
Related questions
Question
Consider the following information:
State of
Economy
Probability of
State of Economy
0.70
0.30
Boom
Bust
Rate of Return if State Occurs
Stock B
Stock C
9.21
0.39
0.02
-0.07
Stock A
0.14
0.11
a. What is the expected return on an equally weighted portfolio of these three stocks? (Do not round intermediate calculations.
Round the final answer to 2 decimal places.)
Expected return
b. What is the variance of a portfolio invested 25% each in A and B and 50% in C? (Do not round intermediate calculations, Round
the final answer to 6 decimal places.)
Variance
Transcribed Image Text:Consider the following information: State of Economy Probability of State of Economy 0.70 0.30 Boom Bust Rate of Return if State Occurs Stock B Stock C 9.21 0.39 0.02 -0.07 Stock A 0.14 0.11 a. What is the expected return on an equally weighted portfolio of these three stocks? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Expected return b. What is the variance of a portfolio invested 25% each in A and B and 50% in C? (Do not round intermediate calculations, Round the final answer to 6 decimal places.) Variance
Expert Solution
steps

Step by step

Solved in 3 steps with 5 images

Blurred answer
Similar questions
Recommended textbooks for you
MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
Statistics
ISBN:
9781119256830
Author:
Amos Gilat
Publisher:
John Wiley & Sons Inc
Probability and Statistics for Engineering and th…
Probability and Statistics for Engineering and th…
Statistics
ISBN:
9781305251809
Author:
Jay L. Devore
Publisher:
Cengage Learning
Statistics for The Behavioral Sciences (MindTap C…
Statistics for The Behavioral Sciences (MindTap C…
Statistics
ISBN:
9781305504912
Author:
Frederick J Gravetter, Larry B. Wallnau
Publisher:
Cengage Learning
Elementary Statistics: Picturing the World (7th E…
Elementary Statistics: Picturing the World (7th E…
Statistics
ISBN:
9780134683416
Author:
Ron Larson, Betsy Farber
Publisher:
PEARSON
The Basic Practice of Statistics
The Basic Practice of Statistics
Statistics
ISBN:
9781319042578
Author:
David S. Moore, William I. Notz, Michael A. Fligner
Publisher:
W. H. Freeman
Introduction to the Practice of Statistics
Introduction to the Practice of Statistics
Statistics
ISBN:
9781319013387
Author:
David S. Moore, George P. McCabe, Bruce A. Craig
Publisher:
W. H. Freeman