Suppose we had the following projections on three stocks: We want to calculate portfolio expected returns in
Question:
Suppose we had the following projections on three stocks:
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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State of Economy Boom Bust Probability of State of Economy .50 .50 Stock A 10% 8 Returns Stock B 15% 4 Stock C 20% 0
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From our earlier discussion the expected returns on the individual stocks are ER A 90 ER B 95 ...View the full answer
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Related Book For
Fundamentals Of Investments Valuation And Management
ISBN: 9781266824012
10th Edition
Authors: Bradford Jordan, Thomas Miller, Steve Dolvin
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