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You are going to make a portfolio consisting of 50 % of Bank of America Stock and 50 % of Caterpillar Stock. You also have the following information:

You are going to make a portfolio consisting of 50 % of Bank of America Stock and 50 % of Caterpillar Stock. You also have the following information:

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
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You are going to make a portfolio consisting of 50 % of Bank of America Stock and 50 % of Caterpillar Stock. You also have the following information: State i Boom Bust 20% Answer: State i Probability of State i Boom 80% Bust Answer: What is the expected return for the portfolio? (Answer as a percentage and Round to 2 decimals) BOA Return. 34% You are going to make a portfolio consisting of 50 % of Bank of America Stock and 50 % of Caterpillar Stock. You also have the following information: 80% -3% 20% Probability BOA of State i Return Caterpillar Return 34 % 39% -3% -2% Caterpillar Return 39% -2% What is the standard deviation for the portfolio? (Answer as a percentage and Round to 2 decimals)
Transcribed Image Text:You are going to make a portfolio consisting of 50 % of Bank of America Stock and 50 % of Caterpillar Stock. You also have the following information: State i Boom Bust 20% Answer: State i Probability of State i Boom 80% Bust Answer: What is the expected return for the portfolio? (Answer as a percentage and Round to 2 decimals) BOA Return. 34% You are going to make a portfolio consisting of 50 % of Bank of America Stock and 50 % of Caterpillar Stock. You also have the following information: 80% -3% 20% Probability BOA of State i Return Caterpillar Return 34 % 39% -3% -2% Caterpillar Return 39% -2% What is the standard deviation for the portfolio? (Answer as a percentage and Round to 2 decimals)
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