a. What is the rate of return on the portfolio in each scenario? (Enter your answer as a percent rounded to 1 decimal place.) Recession: % Normal economy: % Boom: % b. What are the expected rate of return and standard deviation of the portfolio?(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Expected Return: % Standard Deviation: %
a. What is the rate of return on the portfolio in each scenario? (Enter your answer as a percent rounded to 1 decimal place.) Recession: % Normal economy: % Boom: % b. What are the expected rate of return and standard deviation of the portfolio?(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Expected Return: % Standard Deviation: %
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Consider the following scenario analysis:
| Scenario | Probability | Stocks | Bonds | ||
| Recession | 0.3 | -4% | 12% | ||
| Normal economy | 0.4 | 13 | 7 | ||
| Boom | 0.3 | 22 | 3 | ||
a. What is the rate of return on the portfolio in each scenario? (Enter your answer as a percent rounded to 1 decimal place.)
Recession: %
Normal economy: %
Boom: %
b. What are the expected rate of return and standard deviation of the portfolio?(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Expected Return: %
Standard Deviation: %
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