What is the variance of a portfolio consisting of $6,500 in stock A and $4,000in stock B? Returns if State Occurs State of Economy Boom Normal Probability of State of Economy 23% 77% Stock A 26.5% 12% Stock B 12.3% 6.4%

What is the variance of a portfolio consisting of $6,500 in stock A and $4,000in stock B? Returns if State Occurs State of Economy Boom Normal Probability of State of Economy 23% 77% Stock A 26.5% 12% Stock B 12.3% 6.4%

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter3: Risk And Return: Part Ii

Section: Chapter Questions

Problem 3P: Two-Asset Portfolio Stock A has an expected return of 12% and a standard deviation of 40%. Stock B...

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Question

What is the variance of a portfolio consisting of $6,500 in stock A and $4,000in stock B?
Returns if State Occurs
State of Economy
Boom
Normal
Probability of State of
Economy
23%
77%
Stock A
26.5%
12%
Stock B
12.3%
6.4%

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