Consider the following information: Rate of Return If State Occurs State of Probability of Economy State of Economy Stock A Stock B Stock C Boom .15 .35 .45 .33 Good .50 .12 .10 .17 Poor .25 .01 .02 ?.05 Bust .10 ?.11 ?.25 ?.09 Requirement...

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Finance

Consider thefollowing information:
Rate of Return If State Occurs
State of Probability of
Economy State of Economy Stock A Stock B Stock C
        Boom .15    .35     .45    .33
        Good .50    .12    .10    .17
        Poor .25    .01    .02    ?.05
        Bust .10    ?.11    ?.25    ?.09
Requirement 1:
Your portfolio is invested 30 percent each in A and C and 40percent in B. What is the expected return of the portfolio?(Do not round intermediate calculations.Enter your answer as a percentage rounded to 2decimal places (e.g., 32.16).)
  Expected return of the portfolio %
Requirement 2:
(a)
What is the variance of this portfolio? (Do not roundintermediate calculations. Roundyour answer to 5 decimal places(e.g.,32.16161).)
  Variance of the portfolio
(b)
What is the standard deviation of this portfolio?(Do not round intermediate calculations.Enter your answer as a percentage rounded to 2decimal places (e.g., 32.16).)
  Standard deviation %

Answer & Explanation Solved by verified expert

4.2 Ratings (796 Votes)

Stock A Scenario Probability Return rate of return probability Actual return expected returnA A2 probability Boom 015 35 525 246 00090774 Good 05 12 6 16 0000128 Poor 025 1 025 94 0002209 Bust 01 11 11 214 00045796 Expected return sum of weighted return 104 SumVariance Stock A 001599 Standard deviation of Stock A Variance12 1265 Stock B Scenario Probability Return rate of return probability Actual return expected returnA B2 probability Boom 015 45 675 33 See Answer

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Consider thefollowing information:Rate of Return If State OccursState ofProbability ofEconomyState of EconomyStock AStock BStock C Boom.15 .35 .45 .33 Good.50 .12 .10 .17 Poor.25 .01 .02 ?.05 Bust.10 ?.11 ?.25 ?.09 Requirement 1:Your portfolio is invested 30 percent each in A and C and 40percent in B. What is the expected return of the portfolio?(Do not round intermediate calculations.Enter your answer as a percentage rounded to 2decimal places (e.g., 32.16).) Expected return of the portfolio%Requirement 2:(a)What is the variance of this portfolio? (Do not roundintermediate calculations. Roundyour answer to 5 decimal places(e.g.,32.16161).) Variance of the portfolio (b)What is the standard deviation of this portfolio?(Do not round intermediate calculations.Enter your answer as a percentage rounded to 2decimal places (e.g., 32.16).) Standard deviation%

			Rate of Return If State Occurs
State of	Probability of
Economy	State of Economy		Stock A	Stock B	Stock C
Boom		.15	.35	.45	.33
Good		.50	.12	.10	.17
Poor		.25	.01	.02	?.05
Bust		.10	?.11	?.25	?.09