Question: If Microsoft stockholders expect either a 25.8% return or a 2.3% return, each with a 50% probability, and Apple Computer shareholders expect a 9.3% return

If Microsoft stockholders expect either a 25.8% return or a 2.3%

return, each with a 50% probability, and Apple Computer shareholders expect a

9.3% return with certainty, what is the expected return from a portfolio

If Microsoft stockholders expect either a 25.8% return or a 2.3% return, each with a 50% probability, and Apple Computer shareholders expect a 9.3% return with certainty, what is the expected return from a portfolio comprised of equal amounts of stock from both firms? The expected return on the portfolio is %. (Round to two decimal places.) Using the table below, compute the standard deviation of the returns. State of the Economy Recession Moderate Average Good Outstanding Probability (%) 9 19 48 17 7 Projected Return (%) - 7.00 3.00 10.00 14.00 23.00 The standard deviation is %. (Round to two decimal places.) You believe that next year there is a 20% probability of a recession and 80% probability that the economy will be normal. If your stock will yield -13% in a recession and 19% in a normal year, what is the standard deviation of the stock? The standard deviation of the stock is %. (Round to two decimal places.)

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