Question: Here are the data to use for this question, Probability Stock X Return Stock Y Return Good economy .80 20% 40% Bad economy .20 -10%

Here are the data to use for this question,

Probability Stock X Return Stock Y Return

Good economy .80 20% 40%

Bad economy .20 -10% -40%

What is the expected return on a portfolio of 25% in X and 75% in Y?

a)

21.5%
b)

38%
c)

19%
d)

10%

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!

Q:

can someone help me solve these questions with explanation ? Consider the following scenario analysis and answer the following 3 questions: Economy Probability Return on Stock A Return on Stock B...

Q:

please specify each question by using it's number? Bear Market Normal Market Bull Market Probability Stock X Stock Y 0.2 -20% -15% 0.5 18% 20% 0.3 50% 10% 3. What are the expected rates of return for...

Q:

Question 1 (40 marks) You observe the following information about two stocks: State Probability Return on Stock X Return on Stock Y Good 0.39 23% -8% Normal 0.28 11% 6% Poor 0.33 -15% 17% Suppose you...

Q:

Question 1 (40 marks) You observe the following information about two stocks: State Probability Return on Stock X Return on Stock Y Good 0.39 23% -8% Normal 0.28 11% 6% Poor 0.33 -15% 17% Suppose you...

Q:

Question 1 Time left 0:59:5 Not yet answered Marked out of 1.00 P Flag question When choosing between two investments, a risk-neutral investor will always choose the investment with the expected...

Q:

You are given the following set of data: Year Historical Rates of Return NYSE Stock Y 4.0% 2.5% 1 2 21.4 3 3 14.3 19.0 -14.7 10.4 4 -8.0 5 -26.5 -17.6 6 37.2 32.5 7 23.8 8 -7.2 7.0 2.7 12.1 9 6.6 10...

Q:

You are given the following set of data: Year Historical Rates of Return NYSE Stock Y 4.0% 2.5% 1 2 21.4 3 3 14.3 19.0 -14.7 10.4 4 -8.0 5 -26.5 -17.6 6 37.2 32.5 7 23.8 8 -7.2 7.0 2.7 12.1 9 6.6 10...

Q:

The ________ the distribution of possible returns________ is the risk of an investment wider; higher wider; lower narrower; higher None of the above 10 points Question 4 Victoria has concluded that...

Q:

URGENT You will use the following information to answer 5 different questions (I will repeat it again, but it is the same information). You own a portfolio that is invested 50% in stock A and 50% in...

Q:

URGENT Question 1: Question 2: Find beta of a portfolio that consists of $300,000 investment is stock A with beta = 0.8; $500,000 investment in stock B with beta = 1.2; and $200,000 investment in...

Q:

A recent annual report for AMERCO, the holding company for U-Haul International, Inc., included the following note: Note 3: Accounting Policies Property, Plant, and Equipment Property, plant, and...

Q:

1. On January 1, 2018, Karen Company received a land as donation from Klaire Company. The fair value of the land amounted to Php 4,000,000 and a registration and transfer of title cost of Php 40,000...

Q:

Hypothetical comparative condensed balance sheets of Nike, Inc. are presented here. Nike, Inc. Condensed Balance Sheets May 31 eM hy Assets Current assets Property, plant, and equipment (net) Other...

Q:

AbnerCorporation's bonds mature in22 years and pay11 percent interest annually. If you purchase the bonds for$1,200, what is your yield tomaturity? Your yield to maturity on the Abner bonds...

Q:

What resources will these tactics require?

Q:

What level of impact will this tactic make on the key public?

Q:

Have you used powerful language in your message?