Consider the following information:

State of the Economy	Probability of State of the Economy	Return on A %	Return on B %
Boom	0.40	10	4
Growth	0.20	-4	0
Normal	0.20	24	16
Recession	0.20	16	20

 

a) What is the expected return for A For B? 

b) What is the standard deviation for A For B? 

c) What is the expected return on a portfolio of A and B that is 30% invested in A and the remainder in B? 

Answer rating: 100% (QA)

Expected Return ER Probability of State of the Economy Return on Investment S... View the full answer