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You decide to invest in a portfolio consisting of 25 percent Stock X, 36 percent...

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Finance

You decide to invest in a portfolio consisting of 25 percent Stock X, 36 percent Stock Y, and the remainder in Stock Z. Based on the following information, a. Calculate the expected return of your portfolio?

b. Calculate the variance and Standard Deviation of your portfolio?

c. Your expected return is 15%, Is it the right choice of your portfolio mix. Explain

State of Economy

Probability of State of Economy

Return if State Occurs

Stock X

Stock Y

Stock Z

Recession

.103

9.00%

2.40%

11.40%

Normal

.643

8.30%

10.43%

15.80%

Boom

.254

21.33%

24.67%

29.37%

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