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Use the following information to answer questions 3 - 8. The return for two companies, Alpha and Beta, depends on the strength of the economy. Economy Probability Alpha Return Beta Return strong 0.3 12% 5% normal 0.5 6% 8% weak 0.2 2% 10% What is the standard deviation of returns for the portfolio? 0 2.25% 5.575% D O 6.25% 50% 5% 5% C) 8.363% 6% Con Delta. expected to that invests 45% in Gamma and 55% in dard

Use the following information to answer questions 3 - 8. The return for two companies, Alpha and Beta, depends on the strength of the economy. Economy Probability Alpha Return Beta Return strong 0.3 12% 5% normal 0.5 6% 8% weak 0.2 2% 10% What is the standard deviation of returns for the portfolio? 0 2.25% 5.575% D O 6.25% 50% 5% 5% C) 8.363% 6% Con Delta. expected to that invests 45% in Gamma and 55% in dard

Essentials Of Investments
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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Use the following information to answer questions 3 - 8. The return for two companies, Alpha and Beta, depends on the strength of the economy. Economy Probability Alpha Return Beta Return strong 0.3 12% 5% normal 0.5 6% 8% weak 0.2 2% 10% What is the standard deviation of returns for the portfolio? 0 2.25% 5.575% D O 6.25% 50% 5% 5% C) 8.363% 6% Con Delta. expected to that invests 45% in Gamma and 55% in dard
Transcribed Image Text:Use the following information to answer questions 3 - 8. The return for two companies, Alpha and Beta, depends on the strength of the economy. Economy Probability Alpha Return Beta Return strong 0.3 12% 5% normal 0.5 6% 8% weak 0.2 2% 10% What is the standard deviation of returns for the portfolio? 0 2.25% 5.575% D O 6.25% 50% 5% 5% C) 8.363% 6% Con Delta. expected to that invests 45% in Gamma and 55% in dard
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