State of the Economy Boom Bust Probability 0.6 0.4 10.10%. 12.08% 11.72% 14.82%. Return on Security A 15% 5% Return on Security B 8% 20% Given the information in the above table, what is the expected return on a portfolio that is 60% invested in Security A and 40 % invested in Security B?
State of the Economy Boom Bust Probability 0.6 0.4 10.10%. 12.08% 11.72% 14.82%. Return on Security A 15% 5% Return on Security B 8% 20% Given the information in the above table, what is the expected return on a portfolio that is 60% invested in Security A and 40 % invested in Security B?
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 the
Economy
Boom
Bust
Return on
Probability Security A
0.6
15%
0.4
5%
10.10%.
O 12.08%
11.72%
14.82%.
Return on
Security B
8%
20%
Given the information in the above table, what is the expected return on a portfolio
that is 60% invested in Security A and 40% invested in Security B?
Transcribed Image Text:Given the information in the above table, while the standard deviation of the returns
on Security A is ______, the standard deviation of the returns on Security B is
11%; 12.08%
5.88%; 4.90%
4.90%; 5.88%
12.80%; 7.68%
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