Problem 13-10 Returns and Standard Deviations [LO1] Consider the following information: State of Economy Boom Good Poor Bust a. Probability of State- of Economy a. Expected return b-1. Variance b-2. Standard deviation .20 .50 .25 .05 Rate of Return if State Occurs Stock A Stock C .32 .22 .17 .11 -.04 -.12 Your portfolio is invested 28 percent each in A and C, and 44 percent in B. What is the expected return of the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b-1. What is the variance of this portfolio? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161.) b-2. What is the standard deviation? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) % Stock B .42 13 -.07 -.17 0/ -.05 -.09
Problem 13-10 Returns and Standard Deviations [LO1] Consider the following information: State of Economy Boom Good Poor Bust a. Probability of State- of Economy a. Expected return b-1. Variance b-2. Standard deviation .20 .50 .25 .05 Rate of Return if State Occurs Stock A Stock C .32 .22 .17 .11 -.04 -.12 Your portfolio is invested 28 percent each in A and C, and 44 percent in B. What is the expected return of the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b-1. What is the variance of this portfolio? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161.) b-2. What is the standard deviation? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) % Stock B .42 13 -.07 -.17 0/ -.05 -.09
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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![Problem 13-10 Returns and Standard Deviations [LO1]
Consider the following information:
State of Economy
Boom
Good
a.
Poor
Bust
Probability of State-
of Economy
a. Expected return
b-1. Variance
b-2. Standard deviation
.20
.50
.25
.05
Rate of Return if State Occurs
Stock A Stock B
Stock C
.32
42
.22
17
13
.11
-.04
-.12
Your portfolio is invested 28 percent each in A and C, and 44 percent in B. What is
the expected return of the portfolio? (Do not round intermediate calculations and
enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
b-1. What is the variance of this portfolio? (Do not round intermediate calculations and
round your answer to 5 decimal places, e.g., .16161.)
b-2. What is the standard deviation? (Do not round intermediate calculations and enter
your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
-.07
-.17
%
-.05
-.09](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4edc1142-e2c0-4646-9c8a-c46ab87c9771%2F1f40aa93-6d26-46f6-b225-da4eceea21b6%2Fqsff408_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 13-10 Returns and Standard Deviations [LO1]
Consider the following information:
State of Economy
Boom
Good
a.
Poor
Bust
Probability of State-
of Economy
a. Expected return
b-1. Variance
b-2. Standard deviation
.20
.50
.25
.05
Rate of Return if State Occurs
Stock A Stock B
Stock C
.32
42
.22
17
13
.11
-.04
-.12
Your portfolio is invested 28 percent each in A and C, and 44 percent in B. What is
the expected return of the portfolio? (Do not round intermediate calculations and
enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
b-1. What is the variance of this portfolio? (Do not round intermediate calculations and
round your answer to 5 decimal places, e.g., .16161.)
b-2. What is the standard deviation? (Do not round intermediate calculations and enter
your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
-.07
-.17
%
-.05
-.09
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