You are given the following data on several stocks: State of the Economy Boom Expansion Recession...
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You are given the following data on several stocks: State of the Economy Boom Expansion Recession Probability 25% 50% 25% Stock A 40% 12% -20% Stock Returns Stock B 24% 10% -12% Stock C -20% 12% 40% Required: a. Calculate the expected return and standard deviation for each stock. b. Calculate the expected return for a portfolio invested equally in Stock A and Stock C. c. Suppose you decide to invest $10,000 in Stock A and $30,000 in Stock C. If the beta of Stock A and Stock C is 1.5 and 2.1, respectively. What is the beta of this portfolio? You are given the following data on several stocks: State of the Economy Boom Expansion Recession Probability 25% 50% 25% Stock A 40% 12% -20% Stock Returns Stock B 24% 10% -12% Stock C -20% 12% 40% Required: a. Calculate the expected return and standard deviation for each stock. b. Calculate the expected return for a portfolio invested equally in Stock A and Stock C. c. Suppose you decide to invest $10,000 in Stock A and $30,000 in Stock C. If the beta of Stock A and Stock C is 1.5 and 2.1, respectively. What is the beta of this portfolio?
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a To calculate the expected return and standard deviation for each stock we can use the follo... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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