The table below shows the forecasted rate of return based on the prevailing economic conditions. State...
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● The table below shows the forecasted rate of return based on the prevailing economic conditions. State of economy Probability of the economic state Rate of Return Boom 25% 12% 6% Normal Recession. Required: Based on the information given: 0.50 0.20 0.30 . Calculate the expected return of the portfolio ANSWER b (i): ANSWER b (ii): (5 marks in total) Calculate the portfolio risk (the variance and standard deviation) ● The table below shows the forecasted rate of return based on the prevailing economic conditions. State of economy Probability of the economic state Rate of Return Boom 25% 12% 6% Normal Recession. Required: Based on the information given: 0.50 0.20 0.30 . Calculate the expected return of the portfolio ANSWER b (i): ANSWER b (ii): (5 marks in total) Calculate the portfolio risk (the variance and standard deviation)
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To calculate the expected return of the portfolio we need to use the weighted average of the rates o... View the full answer
Related Book For
Intermediate Financial Management
ISBN: 978-1111530266
11th edition
Authors: Eugene F. Brigham, Phillip R. Daves
Posted Date:
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