2. Calculate the expected return, variance, and standard deviations of stock A, stock B, and obtain...

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Finance

2. Calculate the expected return, variance, and standarddeviations of stock A, stock B, and obtain the expected return ofan equally weighted portfolio of both (meaning 50% in A, and 50% inB). Please show all work and formulas used.
Scenario Probability A B
Boom 1/3 -4% 9%
Normal 1/3 8% 4%
Recession 1/3 20% -4%

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3.8 Ratings (324 Votes)

Answer a Stock A Expected Return 13 004 13 008 13 020 Expected Return 008 or 800 Variance 13 004 0082 13 008 0082 13 020 0082 Variance 00096 Standard Deviation 0009612 See Answer

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2. Calculate the expected return, variance, and standarddeviations of stock A, stock B, and obtain the expected return ofan equally weighted portfolio of both (meaning 50% in A, and 50% inB). Please show all work and formulas used.ScenarioProbabilityABBoom1/3-4%9%Normal1/38%4%Recession1/320%-4%

Scenario	Probability	A	B
Boom	1/3	-4%	9%
Normal	1/3	8%	4%
Recession	1/3	20%	-4%