Use the following information to answer the two questions below. State of Prob, of the the economy state of economy Boom Bust 0.30 0.70 Rate of return if state occurs Stock B 0.02 Stock A 0.20 -0.10 0.02 You MUST use 4 digits in every calculation you do in order for your answer to be the same as the one in the system. Enter answer using 4 decimals. Do not use or enter the %. For example, if your answer is 3.480 % enter 0.0350; if your answer is 013013 then enter 01201
Use the following information to answer the two questions below. State of Prob, of the the economy state of economy Boom Bust 0.30 0.70 Rate of return if state occurs Stock B 0.02 Stock A 0.20 -0.10 0.02 You MUST use 4 digits in every calculation you do in order for your answer to be the same as the one in the system. Enter answer using 4 decimals. Do not use or enter the %. For example, if your answer is 3.480 % enter 0.0350; if your answer is 013013 then enter 01201
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Qd 97.
![Use the following information to answer the two questions below.
State of
Prob. of the
the economy
state of economy
Boom
Bust
0.30
each asset?
0.70
Rate of return if state occurs
Stock B
Stock A
0.20
-0.10
0.02
0.02
You MUST use 4 digits in every calculation you do in order for your answer to be the
same as the one in the system. Enter answer using 4 decimals. Do not use or enter
the %. For example, if your answer is 3.480 % enter 0.0350; if your answer is
0.12013 then enter 0.1201
What is the expected return of a portfolio with equal investments in each asset?
A What is the variance of the portfolio with equal investments in](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F323c9976-6b7b-4414-aa82-41105edc66ec%2F1feed6f6-a2cc-45c6-b93f-3443acbd820b%2Fr31e7fb_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Use the following information to answer the two questions below.
State of
Prob. of the
the economy
state of economy
Boom
Bust
0.30
each asset?
0.70
Rate of return if state occurs
Stock B
Stock A
0.20
-0.10
0.02
0.02
You MUST use 4 digits in every calculation you do in order for your answer to be the
same as the one in the system. Enter answer using 4 decimals. Do not use or enter
the %. For example, if your answer is 3.480 % enter 0.0350; if your answer is
0.12013 then enter 0.1201
What is the expected return of a portfolio with equal investments in each asset?
A What is the variance of the portfolio with equal investments in
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