Answered: Given the following information, what…

Given the following information, what is the standard deviation of the returns on a portfolio that is invested 35 percent in both Stocks A and C, and 30 percent in Stock B? (see attached chart)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Given the following information, what is the standard deviation of the returns on a portfolio that is invested 35 percent in both Stocks A and C, and 30 percent in Stock B? (see attached chart)

State of
Probability of
Rate of Return If State Occurs
Economy
State of Economy
Stock A
Stock B
Stock C
Вoom
.20
16.4%
31.8%
11.4%
Normal
.80
11.2%
19.6%
7.3%

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