Consider the following information: Rate of Return if State Occurs State of Probability of State of Economy Stock A Stock B Stock C Boom Economy 0.15 0.32 0.42 0.33 Good 0.45 0.19 0.13 0.12 Poor 0.30 - - 0.05 -0.08 - 0.06 Bust 0.10 - 0.16 -0.28 0.09 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? (Round your answer to 2 decimal places. (e.g., 32.16)) Expected return % b-1What is the variance of this portfolio? (Do not round intermediate calculations and round your answer to 5 decimal places. (e.g., 32.16161)) Variance b-2What is the standard deviation? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Standard deviation %
Consider the following information: Rate of Return if State Occurs State of Probability of State of Economy Stock A Stock B Stock C Boom Economy 0.15 0.32 0.42 0.33 Good 0.45 0.19 0.13 0.12 Poor 0.30 - - 0.05 -0.08 - 0.06 Bust 0.10 - 0.16 -0.28 0.09 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? (Round your answer to 2 decimal places. (e.g., 32.16)) Expected return % b-1What is the variance of this portfolio? (Do not round intermediate calculations and round your answer to 5 decimal places. (e.g., 32.16161)) Variance b-2What is the standard deviation? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) 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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Transcribed Image Text:Consider the following information:
Rate of Return if State Occurs
State of
Probability of
State of
Economy
Stock A
Stock B
Stock C
Boom
Economy
0.15
0.32
0.42
0.33
Good
0.45
0.19
0.13
0.12
Poor
0.30
-
- 0.05
-0.08
-
0.06
Bust
0.10
-
0.16
-0.28
0.09
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? (Round your answer to 2 decimal places. (e.g.,
32.16))
Expected return
%
b-1What is the variance of this portfolio? (Do not round intermediate calculations and
round your answer to 5 decimal places. (e.g., 32.16161))
Variance
b-2What is the standard deviation? (Do not round intermediate calculations and round
your final answer to 2 decimal places. (e.g., 32.16))
Standard
deviation
%
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