Question: please show work! 8) Use the following information to answer parts a and b below. States of the economy Probabilities of States of the Economy
please show work!
8) Use the following information to answer parts a and b below. States of the economy Probabilities of States of the Economy Recession 20% Normal 30% Boom 50% Investment Asset Returns Asset A Asset B Asset C 20% 5% -5% 5% -4% 8% 18% 9% 6% a. Calculate the expected return for each asset. (6) b. Calculate the standard deviation for each asset (8) C. What is the expected return of a portfolio made up of 20% asset A, 40% asset B, and 40% asset C?(8) d. What is the standard deviation of the portfolio described in part (c) above?(7)
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