You decided to invest money into a portfolio of two stocks, Snapchat and Groupon. There are...
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You decided to invest money into a portfolio of two stocks, Snapchat and Groupon. There are two possibilities for what you can earn on each of these two stocks next year, the so-called "thumbs up" state and the so-called "thumbs down" state. The details are in the table below: State of the economy "Thumbs up" state "Thumbs down" state Probability of the state of the economy 60% 40% Proportion of money invested into Snapchat stock = 35% Snapchat stock's return in each state of the economy 47% 12% Proportion of money invested into Groupon stock = 65% GROUPON Groupon stock's return in each state of the economy 18% 29% Calculate the expected return on your portfolio next year. Put your answer in percent but do NOT use the "%" sign, and round to TWO decimal places. For example, if you got 12.34%, type just 12.34. You decided to invest money into a portfolio of two stocks, Snapchat and Groupon. There are two possibilities for what you can earn on each of these two stocks next year, the so-called "thumbs up" state and the so-called "thumbs down" state. The details are in the table below: State of the economy "Thumbs up" state "Thumbs down" state Probability of the state of the economy 60% 40% Proportion of money invested into Snapchat stock = 35% Snapchat stock's return in each state of the economy 47% 12% Proportion of money invested into Groupon stock = 65% GROUPON Groupon stock's return in each state of the economy 18% 29% Calculate the expected return on your portfolio next year. Put your answer in percent but do NOT use the "%" sign, and round to TWO decimal places. For example, if you got 12.34%, type just 12.34.
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To calculate the expected return on the portfolio you need to calculate the weighted average of the ... View the full answer
Related Book For
Personal Financial Planning
ISBN: 9780357438480
15th Edition
Authors: Randy Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Posted Date:
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