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Use the following table of states of the economy and stock returns to calculate the percentage...

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Finance

Use the following table of states of the economy and stockreturns to calculate the percentage standard deviation of aportfolio of a portfolio of 40 percent Roll and the rest inRoss.

Security

if State

Returns

Occurs

Prob of State of EconomyRollRoss
Bust0.1-17%27%
Boom?399

Answer & Explanation Solved by verified expert
3.8 Ratings (482 Votes)
Solution Standard deviation of the portfolio 348 Working Notes Notes Since there is only two state of economy and probability of one state is given 010 for BUST then For Probability of BOOM 1 probability of bust 1 010 090 as total probability is 1 Hence Prob of State of Economy    See Answer
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