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25% chance of BOOM! 50% normal 25% recession B The investor compares returns for stock...

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Finance

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25% chance of BOOM! 50% normal 25% recession B The investor compares returns for stock A and B A Recession 5% Norm 10 Boom 20 -2% 15 30 Find the expected return for A and B. 1 Find standard deviation. Bi R Bir (02 Pi totals Recession Normal Boom Bi R Bi-T (0542 ei totals B Recession Normal Boom If an investor puts 25% in stock A with an expected return of 15% and 75% in stock B with an expected return of 10%, find the expected return on the portfolio. If an investor puts 30% in stock A with an expected return of 20% and 70% in stock B with an expected return of 12%, find the expected return on the portfolio. 75% of a portfolio is invested in A, 25% in B, the standard deviation of A is 10%, the standard deviation of B is 15%, the correlation coefficient of AB is +0.5. If Company A has a beta of 1.25, the risk free rate of return is 1%, and the expected return on the market is 12%, calculate CAPM. If Company B has a beta of.95, the risk free rate of return is 2%, and the expected return on the market is 11%, calculate CAPM

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