ABC Ltd owns three stocks and has estimated the following probabilities of returns: Outcome Probability Return of A (%) Return of B (%) Return of C (%) 1 0.3 -10 10 2 2 0.2 2 10 10 3 0.3 10 5 15 4 0.2 20 -10 5 

Required a) Compute the expected returns for A , B and C 

b) Compute the standard deviation for each stock 

c) Compute the expected return for the portfolio if ABC ltd invested 20%, 50% and 30% in stocks A , B and C respectively 

d) Compute the risk of the portfolio in (c)

Answer rating: 100% (QA)

Answer a The expected return for stock A can be calculated as follows Expected Return for A 03 x 10 ... View the full answer