•Question 1Suppose financial analysts believe that there are four equally likelystates of the economy: depression, recession, normal, and boom.The returns on the Supertech Company are expected to follow theeconomy closely, while the returns on the Slowpoke Company arenot. The return predictions are as follows:States of the economyAllos Inc. Returns (RA)Orangus Inc.Returns (Rg)snäurDepression-20%Recession20%%10%Normal-12%%6Required:1. For each company calculate:i. the expected returnsii. the Variance2. Assuming you are an investor with GHS100 available. If you investGHS60 and GHS40 in Allos Inc. and Orangus Inc. respectively,jii. the Standard deviationwhat will be your portfolio returns?3. Calculate the Standard deviation of the portfolio.

Introduction Expected Return: The projected return is the profit or loss that an investor can…

Answered: Suppose financial analysts believe that…

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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Suppose financial analysts believe that there are four equa states of the economy: depression, recession, normal, and a The returns on the Supertech Company are expected to follo uhilo t ho rotu on the Clown oke Co mpa