State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B Stock C Boom .21 .368 .468 .348 Good .39 .138 .118 .188 Poor Bust .29 .11 .028 -.128 .038 -.093 -.268 -.108 a. Your portfolio is invested 29 percent each in A and C and 42 percent in B. What is the expected return of the portfolio? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. What is the variance of this portfolio? Note: Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161. c. What is the standard deviation of this portfolio? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. Expected return b. Variance c. Standard deviation % %
State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B Stock C Boom .21 .368 .468 .348 Good .39 .138 .118 .188 Poor Bust .29 .11 .028 -.128 .038 -.093 -.268 -.108 a. Your portfolio is invested 29 percent each in A and C and 42 percent in B. What is the expected return of the portfolio? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. What is the variance of this portfolio? Note: Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161. c. What is the standard deviation of this portfolio? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. Expected return b. Variance c. Standard deviation % %
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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Transcribed Image Text:State of
Economy
Probability of
State of Economy
Rate of Return if State Occurs
Stock A
Stock B
Stock C
Boom
.21
.368
.468
.348
Good
.39
.138
.118
.188
Poor
Bust
.29
.11
.028
-.128
.038
-.093
-.268
-.108
a. Your portfolio is invested 29 percent each in A and C and 42 percent in B. What is the expected return of the portfolio?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
b. What is the variance of this portfolio?
Note: Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161.
c. What is the standard deviation of this portfolio?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
a. Expected return
b. Variance
c. Standard deviation
%
%
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