Consider the following information: Rate of Return if State Occurs Probability of State State of Economy of Economy Stock A Stock B Stock C Boom .15 .35 .40 .28 Good .45 .16 .17 .09 Poor .30 Bust .10 -.01 -.10 -.03 -.12 .01 -.09 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? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b-1. What is the variance of this portfolio? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161.) b-2. What is the standard deviation? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Expected return b-1. Variance % b-2. Standard deviation %
Consider the following information: Rate of Return if State Occurs Probability of State State of Economy of Economy Stock A Stock B Stock C Boom .15 .35 .40 .28 Good .45 .16 .17 .09 Poor .30 Bust .10 -.01 -.10 -.03 -.12 .01 -.09 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? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b-1. What is the variance of this portfolio? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161.) b-2. What is the standard deviation? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Expected return b-1. Variance % b-2. 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
Related questions
Question
Radhubhai
Transcribed Image Text:Consider the following information:
Rate of Return if State Occurs
Probability of State
State of Economy
of Economy
Stock A
Stock B
Stock C
Boom
.15
.35
.40
.28
Good
.45
.16
.17
.09
Poor
.30
Bust
.10
-.01
-.10
-.03
-.12
.01
-.09
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? (Do not round intermediate calculations and
enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
b-1. What is the variance of this portfolio? (Do not round intermediate calculations and
round your answer to 5 decimal places, e.g., .16161.)
b-2. What is the standard deviation? (Do not round intermediate calculations and enter
your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
a. Expected return
b-1. Variance
%
b-2. Standard deviation
%
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