Question: Expected return and standard deviation for stocks A and B are shown in the table below. Probability Rate of return if state occurs State of

 Expected return and standard deviation for stocks A and B are

Expected return and standard deviation for stocks A and B are shown in the table below. Probability Rate of return if state occurs State of of state of Economy the economy Stock Stock Recession 2 -10 .15 Normal .5 .20 .22 Boom 3 .60 29 Expected return 26 227 Standard Deviation .25 .05 Refer to the information in the table above. Suppose you have $50,000 total. If you put $30,000 in Stock A and $20,000 in Stock B, what will be the expected return and standard deviation of your portfolio

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!