Suppose we had the following projections on three stocks: We want to calculate portfolio expected returns in

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Suppose we had the following projections on three stocks:

State of Economy Boom Bust Probability of State of Economy .50 .50 Stock A 10% 8 Returns Stock B 15% 4 Stock

We want to calculate portfolio expected returns in two cases. First, what would be the expected return on a portfolio with equal amounts invested in each of the three stocks? Second, what would be the expected return if half of the portfolio were in A, with the remainder equally divided between B and C?

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Fundamentals Of Investments Valuation And Management

ISBN: 9781266824012

10th Edition

Authors: Bradford Jordan, Thomas Miller, Steve Dolvin

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