Example 12: The following are the different state of economy, theprobability of occurrence of that state and the expected rate of return fromsecurity A and B in these different states:Rate of ReturnStateProbabilitySecurity ASecurity BRecession0-20- 0:150-20Normal0.500-20()-30Boom0-300.600.40Find out the expected returns and the standard deviations for these twosecurities. Suppose, an iuvestor has 20,000 to invest. He invests 15,000in security A and balance in security B, what will be the expected returnand the standard deviation of the portfolio?

Answered: Image /qna-images/answer/ed85e678-2da7-426a-b986-812b56747766.jpg

Answered: Find out the expected returns and the…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Please explain
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Solve for all parts correctly and quickly
5. The changes in the values of two investment portfolios are modelled as Normal distributions. From day to day, the first investment portfolio changes in value with mean 2.6% and standard deviation 1.8%. From day to day, the second investment portfolio changes in value with mean 2.2% and standard deviation 2.5%. An investor is hoping for growth of at least 4%. Which portfolio is most likely to give growth of 4%?
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Find out the expected returns and the standard deviations for these two securities. Suppose, an iuvestor has 20,000 to invest. He invests 15,000 in security A and balance in security B, what will be the expected return and the standard deviation of the portfolio?