Consider the following information: State of Economy Boom Bust Probability of State of Economy a. Expected...
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Consider the following information: State of Economy Boom Bust Probability of State of Economy a. Expected return b. Variance .70 .30 Rate of Return if State Occurs % Stock A 14 .12 Stock B .21 .02 a. What is the expected return on an equally weighted portfolio of these three stocks? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the variance of a portfolio invested 25 percent each in A and B and 50 percent in C? (Do not round intermediate calculations and round your answer to 6 decimal places, e.g., .161616.) Stock C .39 -.07 Consider the following information: State of Economy Boom Bust Probability of State of Economy a. Expected return b. Variance .70 .30 Rate of Return if State Occurs % Stock A 14 .12 Stock B .21 .02 a. What is the expected return on an equally weighted portfolio of these three stocks? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the variance of a portfolio invested 25 percent each in A and B and 50 percent in C? (Do not round intermediate calculations and round your answer to 6 decimal places, e.g., .161616.) Stock C .39 -.07
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a To calculate the expected return on an equally weighted portfolio of the three stocks we need to m... View the full answer
Related Book For
Corporate Finance Core Principles and Applications
ISBN: 978-1259289903
5th edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
Posted Date:
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