Question: Answer to question 3 is needed please. I've attached question 2 since it's related to the next question. Using the probabilty distnbution shown below, calculate
Using the probabilty distnbution shown below, calculate the expected nisk and retum estimates of a portfolio comprised of 50% of Stock X and 50% of Stock Y A. The portfolio has an expected return of 8.6% and a standard deviation of 6.24% B. The portfolio has an expected return of 7.67% and a standard devation of 7.09%. C. The portfolio has an expected return of 8.6% and a standard deviation of 2.50% D. The portfolio has an expected return of 8.646 and a standard deviation of 2.66% QUESTION 3 Using the same intormation from Question 2 , how wil you choose be\$ween Stock x and the portfolio (50\% Stock x+503 Stock Y)? A. Stock X is a better investment, since stock X has a higher expected retum B. The portolio is a better investment, since the portiolio has a higher expected return and s lower standard deviation. c. Stock Xira better imvestment, since Stock X has a higher lower standard deviation. D. it depends. Neither is strictly better. Although Stock X has a higher expected return, the portfolio has a lower standard deviation
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
