State of Probability of State of Economy .69 .31 Economy Boom Bust Rate of Return if State Occurs Stock A .12 Stock C .37 -.17 .26 Stock B .06 .32 What is the expected return on an equally weighted portfolio of these three stocks? (Do not round intermediate calculations and nter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) xpected return % What is the variance of a portfolio invested 24 percent each in A and B and 52 percent in C? (Do not round intermediate calculatio nd round your answer to 5 decimal places, e.g., 32.16161.) ariance of a portfolio
State of Probability of State of Economy .69 .31 Economy Boom Bust Rate of Return if State Occurs Stock A .12 Stock C .37 -.17 .26 Stock B .06 .32 What is the expected return on an equally weighted portfolio of these three stocks? (Do not round intermediate calculations and nter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) xpected return % What is the variance of a portfolio invested 24 percent each in A and B and 52 percent in C? (Do not round intermediate calculatio nd round your answer to 5 decimal places, e.g., 32.16161.) ariance of a portfolio
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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Question
A 133.
Transcribed Image Text:State of Probability of State
of Economy
Economy
Boom
Bust
.69
.31
Rate of Return if State Occurs
Stock A Stock B
.12
.26
%
.06
.32
Stock C
.37
-.17
a. What is the expected return on an equally weighted portfolio of these three stocks? (Do not round intermediate calculations and
enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Expected return
b. What is the variance of a portfolio invested 24 percent each in A and B and 52 percent in C? (Do not round intermediate calculations
and round your answer to 5 decimal places, e.g., 32.16161.)
Variance of a portfolio
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