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Portfolio Risk and Return: You are given the following distributions of returns for assets (single stock or portfolio) A, B, and C. Economic Conditions Probability Return  on  asset     A B C Boom  .30 60% 50% 10% Normal .40 40 30 50 Bust .30 20 10 90               Find the expected return (think of this as the mean return) and standard deviation of B and C. (A’s expected return is 40% and its standard deviation is 15.49%)

Portfolio Risk and Return: You are given the following distributions of returns for assets (single stock or portfolio) A, B, and C. Economic Conditions Probability Return  on  asset     A B C Boom  .30 60% 50% 10% Normal .40 40 30 50 Bust .30 20 10 90               Find the expected return (think of this as the mean return) and standard deviation of B and C. (A’s expected return is 40% and its standard deviation is 15.49%)

Essentials Of Investments
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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  1. Portfolio Risk and Return: You are given the following distributions of returns for assets (single stock or portfolio) A, B, and C.

Economic Conditions Probability Return  on  asset
    A B C
Boom  .30 60% 50% 10%
Normal .40 40 30 50
Bust .30 20 10 90
         

 

 

  1. Find the expected return (think of this as the mean return) and standard deviation of B and C. (A’s expected return is 40% and its standard deviation is 15.49%)
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