State of Economy Boom Good Poor Bust Probability of State of Economy .20 .15 .20 .45 Rate of Return if State Occurs Variance of this portfolio Stock A Stock B .20 .33 .15 .12 .01 -.09 -.21 -.26 Stock C -2.73 % .29 13 a. Your portfolio is invested 30 percent each in A and C, and 40 percent in B. What is the expected return of the portfolio? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.) Expected return b- What is the variance of this portfolio? (Do not round intermediate calculations. 1. Round your answer to 5 decimal places.) -.06 -.13 b- What is the standard deviation? (Do not round intermediate calculations. Enter your 2. answer as a percent rounded to 2 decimal places.)
State of Economy Boom Good Poor Bust Probability of State of Economy .20 .15 .20 .45 Rate of Return if State Occurs Variance of this portfolio Stock A Stock B .20 .33 .15 .12 .01 -.09 -.21 -.26 Stock C -2.73 % .29 13 a. Your portfolio is invested 30 percent each in A and C, and 40 percent in B. What is the expected return of the portfolio? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.) Expected return b- What is the variance of this portfolio? (Do not round intermediate calculations. 1. Round your answer to 5 decimal places.) -.06 -.13 b- What is the standard deviation? (Do not round intermediate calculations. Enter your 2. answer as a percent rounded to 2 decimal places.)
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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I need help with this question I can get the first part, but I cannot get the correct standard deviation.
Transcribed Image Text:State of
Economy
Boom
Good
Poor
Bust
Probability of
State of Economy
.20
.15
.20
.45
Variance of this
portfolio
Rate of Return if State
Occurs
Stock A Stock B
.33
12
Standard
deviation
.20
.15
.01
-.21
-.09
-.26
a. Your portfolio is invested 30 percent each in A and C, and 40 percent in B. What is the
expected return of the portfolio? (Do not round intermediate calculations. Enter your
answer as a percent rounded to 2 decimal places. Omit the "%" sign in your
response.)
Expected return
b- What is the variance of this portfolio? (Do not round intermediate calculations.
1. Round your answer to 5 decimal places.)
-2.73 %
Stock C
.29
.13
-.06
-.13
b- What is the standard deviation? (Do not round intermediate calculations. Enter your
2. answer as a percent rounded to 2 decimal places.)
%
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