A B

Boom: $1/3,25\%,1\%$

Normal: $1/3,5\%,5\%$

Recessin: $1/3,-5\%,12\%$

$$ portfolio variance.pdf $147KB$

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Refer to the attachment, which provides expected returns for $2$ assets$-"$A$"$ & $"$B$"$ for $3$ different states of nature: Boom, Normal, & Recession. Each state is considered to be equally probable.

For each of the following calculations, express your answer in percentage terms, rounded to $2$ decimal places $($ie $22\mathrm{.}00).$

What is the expected return for Asset $A,E(R_A)?$

$\%$

What is the expected standard deviation in returns for Asset B$?$

$\%$

Suppose that a portfolio is created with a $25\%$ invested in Asset A and $75\%$ invested in Asset B$.$

What is the expected return for the portfolio, $E(R_P)?$

$\%$

What is the expected standard deviation in returns for the portfolio?

$\%$

Refer to the attachment, which provides expected returns for $2$ assets$-"$A$"$ & $"$B$"$ for $3$ different states of nature: Boom, Normal, & Recession. Each state is considered to be equally probable.

For each of the following calculations, express your answer in percentage terms, rounded to $2$ decimal places $($ie $22\mathrm{.}00).$

What is the expected return for Asset $A,E(R_A)?$

$\%$

What is the expected standard deviation in returns for Asset B$?$

$\%$

Suppose that a portfolio is created with a $25\%$ invested in Asset A and $75\%$ invested in Asset B$.$

What is the expected return for the portfolio, $E(R_P)?$

$\%$

What is the expected standard deviation in returns for the portfolio?

$\%$