Question: Please solve using Excel. Consider the following two funds and their estimated returns under different states of the economy: State of economy Probability Estimated Return
Consider the following two funds and their estimated returns under different states of the economy: State of economy Probability Estimated Return (Fund A) Estimated Return (Fund B) Great Average Poor 30% 30% 40% 10% 15% 20% 25% 11% 15% Calculate the following: a. Expected return for fund A and for fund B b. Standard deviation of returns for fund A and fund B c. Covariance between returns of fund A and fund B d. Correlation between returns of fund A and fund B If you invest $2,000 in Fund A and $8,000 in Fund B, Calculate the following: e. Portfolios' Expected Return f. Portfolio's Standard Deviation
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