Consider the following information: Probability of State of State of Economy Boom Bust Economy .64 36 a. Expected return b. Variance. Rate of Return if State Occurs Stock A Stock B Stock C 11 .20 .38 18 .10 -.04 a. What is the expected return on an equally weighted portfolio of these three stocks? (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 a portfolio invested 20 percent each in A and B and 60 percent in C? (Do not round intermediate calculations and round your answer to 6 decimal places, e.g., .161616.) %
Consider the following information: Probability of State of State of Economy Boom Bust Economy .64 36 a. Expected return b. Variance. Rate of Return if State Occurs Stock A Stock B Stock C 11 .20 .38 18 .10 -.04 a. What is the expected return on an equally weighted portfolio of these three stocks? (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 a portfolio invested 20 percent each in A and B and 60 percent in C? (Do not round intermediate calculations and round your answer to 6 decimal places, e.g., .161616.) %
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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Please solve it thanks a lot , dont do handwritten
Transcribed Image Text:Consider the following information:
Probability of
State of
State of
Economy
Boom
Bust
Economy
64
36
a. Expected return
b. Variance
Rate of Return if State Occurs
Stock A Stock B Stock C
11
.20
.38
18
.10
-.04
a. What is the expected return on an equally weighted portfolio of these three stocks?
(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 a portfolio invested 20 percent each in A and B and 60
percent in C? (Do not round intermediate calculations and round your answer to 6
decimal places, e.g., .161616.)
%
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