Calculate the expected return of portfolio and standard deviation of portfolio of 3 Assets (Security B, C, and D) (Hints: Assume that weights of B, C, and D are , respectively; the expected rate of return for Security B, C, and D is 9.9%, 1.2%, 7.3%, respectively)? Prob. Security A Security B Security C Security D Security E Recession 0.1 3.0% -29.5% 24.5% 3.5% -19.5% Below avg. 0.2 3.0% -9.5% 10.5% -16.5% -5.5% Average 0.4 3.0% 12.5% -1.0% 0.5% 7.5% Above avg. 0.2 3.0% 27.5% -5.0% 38.5% 22.5% Boom 0.1 3.0% 42.5% -20.0% 23.5% 35.5%
Calculate the expected return of portfolio and standard deviation of portfolio of 3 Assets (Security B, C, and D) (Hints: Assume that weights of B, C, and D are , respectively; the expected rate of return for Security B, C, and D is 9.9%, 1.2%, 7.3%, respectively)? Prob. Security A Security B Security C Security D Security E Recession 0.1 3.0% -29.5% 24.5% 3.5% -19.5% Below avg. 0.2 3.0% -9.5% 10.5% -16.5% -5.5% Average 0.4 3.0% 12.5% -1.0% 0.5% 7.5% Above avg. 0.2 3.0% 27.5% -5.0% 38.5% 22.5% Boom 0.1 3.0% 42.5% -20.0% 23.5% 35.5%
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
Related questions
Question
- Calculate the expected return of portfolio and standard deviation of portfolio of 3 Assets (Security B, C, and D) (Hints: Assume that weights of B, C, and D are , respectively;
the expected
|
Prob. |
Security A |
Security B |
Security C |
Security D |
Security E |
|
|
Recession |
0.1 |
3.0% |
-29.5% |
24.5% |
3.5% |
-19.5% |
|
Below avg. |
0.2 |
3.0% |
-9.5% |
10.5% |
-16.5% |
-5.5% |
|
Average |
0.4 |
3.0% |
12.5% |
-1.0% |
0.5% |
7.5% |
|
Above avg. |
0.2 |
3.0% |
27.5% |
-5.0% |
38.5% |
22.5% |
|
Boom |
0.1 |
3.0% |
42.5% |
-20.0% |
23.5% |
35.5% |
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 2 images
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education