Question: LO1 6. Calculating Expected Return Based on the following information, calculate the expected return. State of Economy Probability of State of Economy Rate of Return

LO1 6. Calculating Expected Return Based on the following information, calculate the expected return. State of Economy Probability of State of Economy Rate

LO1 6. Calculating Expected Return Based on the following information, calculate the expected return. State of Economy Probability of State of Economy Rate of Return if State Occurs Recession .15 -.12 Normal Boom LO1 7. Calculating Returns and Standard Deviations Based on the following information, calculate the expected returns and standard deviations for the two stocks. Rate of Return if State Occurs Probability of State of Economy State of Economy Stock A Stock B Recession -.30 Normal Boom 10. Returns and Standard Deviations Consider the following information: Rate of Return if State Occurs Probability of State of Economy State of Economy Stock A Stock B Stock C Boom 45 .33 .17 Good .10 Poor -.05 Bust -.09 a. Your portfolio is invested 25 percent each in A and C and 50 percent in B. What is the expected return of the portfolio? b. What is the variance of this portfolio? The standard deviation

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