Consider the following information: State of Economy Probability of State of Economy Boom Bust .71 .29...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Consider the following information: State of Economy Probability of State of Economy Boom Bust .71 .29 Stock A .09 .18 Stock B .03 Rate of Return if State Occurs Stock C .29 .24 -.09 a. What is the expected return on an equally weighted portfolio of these three stocks? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. What is the variance of a portfolio invested 26 percent each in A and B and 48 percent in C? Note: Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161. a. Expected return b. Variance of portfolio 12.89% Consider the following information: State of Economy Probability of State of Economy Boom Bust .71 .29 Stock A .09 .18 Stock B .03 Rate of Return if State Occurs Stock C .29 .24 -.09 a. What is the expected return on an equally weighted portfolio of these three stocks? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. What is the variance of a portfolio invested 26 percent each in A and B and 48 percent in C? Note: Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161. a. Expected return b. Variance of portfolio 12.89%
Expert Answer:
Posted Date:
Students also viewed these finance questions
-
You have this information r*=2.5%, inflation premium =3%, default risk premium=3.5%, liquidity premium =2% and maturity risk premium =1.5%.What is the treasury bill rate?
-
Look up the responsible business website of a multinational corporation online and find one example for each of the six communication tools highlighted in this chapter.
-
The Big Ship Manufacturing Company manufactures custom made ships.The company utilizes a job order cost system based upon normal costs to cost each job.There are two direct cost categories (direct...
-
The following financial information is taken from the annual report of Intel Corporation: Using the above data, calculate the companys inventory turnover, inventory-on-hand period, and gross profit...
-
Big Thumbs Company manufactures portable flash drives for computers. Big Thumbs incurs monthly depreciation costs of $15,000 on its plant equipment and monthly advertising costs of $3,000 to place...
-
Elaine mentions the following: "My mom purchased metformin 5 years ago, I am not sure the dosage, can I just take her med?" Please provide a rational including at least 2 reasons supporting your
-
Jimmy Sibock is in a weight managment program at his local gym. He has been participating in the program for the past five years. In Year 1 (2000), Jimmy's weight was 284 pounds. In year five (2005),...
-
Luke's Wedding Cakes creates elaborate wedding cakes. Each cake sells for $500. The variable cost of baking the cakes is $200 and the fixed cost per month is $6,000. Break- even point, as calculated...
-
5. At June 30, 2016, before any adjustments for errors and other year-end adjusting entries, a company's allowance for bad debts was a credit balance of $39,000. Accounts receivables totalled...
-
Actual direct materials cost = $ 1 . 0 5 per pound Standard direct materials cost = $ 1 . 1 0 per pound Actual quantity purchased and used = 2 , 0 0 0 pounds Standard quantity that should have been...
-
Hi - Tech Incorporated produces two different products with the following monthly data Cell GPS Total Selling price per unit 1 0 0 4 0 0 Variable cost per unit 4 0 2 4 0 Expected unit sales 2 1 , 0 0...
-
On January 1 , 2 0 0 9 , Korman Company purchased 9 % bonds having a maturity value of $ 1 , 0 0 0 , 0 0 0 for $ 9 6 2 , 0 0 0 . The bonds provide the bondholders with a 1 0 % yield. The coupon is...
-
The accounting income of Grace Corporation and its taxable income for the years 2020 to 2023 are as follows: Year Accounting Income Taxable Income Tax Rate 2020 $460,000 $299,000 25% 2021 420,000...
-
In a large midwestern university, 30% of the students live in apartments. If 200 students are randomly selected, find the probability that the number of them living in apartments will be between 55...
-
Curry Company has two divisions, Eastern Division and Western Division. Curry Company has been allocating overhead based on direct labor hours. For the most recent year, the predetermined overhead...
-
The controller for Tamale Cooking Oil Co. established the following overhead cost pools and cost drivers: An order of 80 finished barrels of cooking oil used: If the company uses activity-based...
-
Clear View, Inc. provides quarterly commercial window cleaning services for three high-rise commercial buildings, Sequoia, Tower Plaza, and Cornwall, and it uses a job costing system for determining...
Study smarter with the SolutionInn App