Consider the following information: State of Probability of Economy State of Economy .20 .40 .30 .10 Boom Good Poor Bust Stock A .361 .131 .021 -.121 Rate of Return if State Occurs Stock B .461 .111 .031 -.261 Stock C .341 181 -.867 -.101 a. Your portfolio is invested 31 percent each in A and C and 38 percent in B. Wirat 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? Note: Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161. 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.
Consider the following information: State of Probability of Economy State of Economy .20 .40 .30 .10 Boom Good Poor Bust Stock A .361 .131 .021 -.121 Rate of Return if State Occurs Stock B .461 .111 .031 -.261 Stock C .341 181 -.867 -.101 a. Your portfolio is invested 31 percent each in A and C and 38 percent in B. Wirat 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? Note: Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161. 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.
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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Question
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Transcribed Image Text:Consider the following information:
State of Probability of
Economy State of Economy
Boom
Good
Poor
Bust
.20
.40
.30
.10
Stock A
.361
.131
.021
-.121
a. Expected return
b. Variance
c. Standard deviation
Rate of Return if State Occurs
Stock B
a. Your portfolio is invested 31 percent each in A and C and 38 percent in B. Wifat 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.
%
.461
.111
.031
-.261
b. What is the variance of this portfolio?
Note: Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161.
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.
%
Stock C
.341
181
-.867
-.101
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