Use the following table of states of the economy and stock returns to calculate the expected return
Question:
Use the following table of states of the economy and stock returns to calculate the expected return on a portfolio of 49 percent Roten and the rest in Bradley.
Security if State | Returns Occurs | ||
Prob of State of Economy | Roten | Bradley | |
Bust | 0.8 | -12% | 29% |
Boom | ? | 46 | 7 |
QUESTION 2
Use the following table of states of the economy and stock returns to calculate the percentage standard deviation of a portfolio of a portfolio of 80 percent Roten and the rest in Bradley.
Security if State | Returns Occurs | ||
Prob of State of Economy | Roten | Bradley | |
Bust | 0.2 | -12% | 30% |
Boom | ? | 37 | 5 |
QUESTION 3
Use the following information to calculate the percentage expected return a portfolio that is 39.7 percent invested in 3 Doors, Inc., and the rest invested in Down Co.:
3 Dorrs, Inc. | Down Co. | |
Expected return | 23% | 13% |
Standard deviation | 39 | 9 |
Correlation | 88 |
QUESTION 4
Use the following information to calculate the percentage standard deviation of a portfolio that is 72.5 percent invested in 3 Doors, Inc., and the rest invested in Down Co.:
3 Dorrs, Inc. | Down Co. | |
Expected return | 16% | 9% |
Standard deviation | 50 | 32 |
Correlation | 0.35 |
Fundamentals of Investments, Valuation and Management
ISBN: 978-1259720697
8th edition
Authors: Bradford Jordan, Thomas Miller, Steve Dolvin