PowerPoint File Edit View Insert Format Format Arrange Wed Jul 29 8:32:28 PM Q Tools Slide Show Window Help *M* = 0)) 37% O Ch.11-1-3-Risk-Return-NoVoice - Saved to my Mac AutoSave OFF Q Home Insert Draw Design Transitions Animations Slide Show Review View Share Comments nu v y v v Layout Reset O Section Times New Roman 16 ~ A po I # x x AV V Aarova Paste New Slide B Convert to SmartArt Picture TAT Arrange Quick Sensitivity Styles 1 Extra 5 points exercise Table 11.6 Race of return assumptions for two stocks 2 Table 11.8 Rates of return for two stocks and a portfolio with 75% invested in the auto stock and 25% in the gold stock Portraim (75 vouw) - (25 gold room Rate of Return (%) Rate of Return (%) Scenario Probability Auto Stock Gold Stock Scenario Probability Auto Stock Gold Stock Portfolio Return (%) 3 Recession 1/3 8 +20 Recession 1/3 -B +20 - 1.0 Normal 1/3 +5 +3 Normal 1/3 +5 -3 +4.5 Boom 1/3 +18 -20 Boom 1/3 +18 -20 +8.5 Expected return 5 1 4. Variance 112.7 269.7 15.2 Standard deviation 10.6 16.4 3.9 ???? Show why standard deviation of portfolio is 3.9. Hint: After calculate Covariance, use SD,= v(W.2 SD, 2 +W.2 SD 2 + 2 *W, *WCova b) Slide 4 of 4 English (United States) Notes Comments E + 105%