Consider the following information: Probability of State of Economy State of Economy Boom Good Poor Bust .18 .42 32 .08 a. Expected return b. Vanance c. Standard deviation Stock A -365 -135 .025 125 Rate of Return if State Occurs Stock B a. Your portfolio is invested 30 percent each in A and C and 40 percent in B. What is the expected return of the portfolio? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. What is the variance of this portfolio? Answer is complete but not entirely correct. 164 55 % 547 20000 Note: Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161. e. What is the standard deviation of this portfolio? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. 465 -115 .035 --265 23 38 % Stock C .345 185 -.090 --105
Consider the following information: Probability of State of Economy State of Economy Boom Good Poor Bust .18 .42 32 .08 a. Expected return b. Vanance c. Standard deviation Stock A -365 -135 .025 125 Rate of Return if State Occurs Stock B a. Your portfolio is invested 30 percent each in A and C and 40 percent in B. What is the expected return of the portfolio? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. What is the variance of this portfolio? Answer is complete but not entirely correct. 164 55 % 547 20000 Note: Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161. e. What is the standard deviation of this portfolio? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. 465 -115 .035 --265 23 38 % Stock C .345 185 -.090 --105
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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Nikul
Transcribed Image Text:Consider the following information:
State of Probability of
Economy State of Economy
Boom
Good
Poor
Bust
.18
.42
.32
.08
Stock A
.365
.135
.025
125
a. Expected return
b. Variance.
c. Standard deviation
Answer is complete but not entirely correct.
a. Your portfolio is invested 30 percent each in A and C and 40 percent in B. What is the expected return of the portfolio?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
b. What is the variance of this portfolio?
16161.
Note: Do not round intermediate calculations and round your answer to 5 decimal places, e.g.,:
c. What is the standard deviation of this portfolio?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
164 55 %
Rate of Return if State Occurs
Stock B
547 20000 x
23:38 X %
465
115
.835
-.265
Stock C
.345
185
-.090
-.105
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