Use the information in the table below to answer the following question: State of Economy...

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Finance

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Use the information in the table below to answer the following question: State of Economy Probability of State of Economy Return to Stock Q Return to Stock R 16% Boom 0.1 14% 0.9 8% 11% Normal What is the standard deviation of returns of Stock R? 1.80% 3.54% 4.28% 2.50% 1.50% Use the information in the table below to answer the following question: Probability of State of Economy State of Economy Return to Stock Q Return to Stock R Boom 0.1 14% 16% 0.9 8% 11% Normal What is the standard deviation of the returns on a portfolio that is invested 52 percent in stock Q and 48 percent in stock R? 1.79% 2.50% 1.60% 1.66% -1.66% Use the information in the table below to answer the next four questions: State of Economy Return to Stock Q Probability of State of Economy Return to Stock R 14% Boom 0.1 16% Normal 0.9 8% 11% What is the expected return of Stock Q? 11.00% 11.50% 8.60% 14.00% 13.40%

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