Question: Question 1: Given the following probability distributions: Probability RA R B 0.3 0.2 0.5 0.3 0.05 0.1 0.15 -0.02 0.25 Calculate (a) expected return, (b)
Question 1: Given the following probability distributions: Probability RA R B 0.3 0.2 0.5 0.3 0.05 0.1 0.15 -0.02 0.25 Calculate (a) expected return, (b) standard deviation (c) coefficient of variation for each stock Question 2: What is the expected return on the portfolio of 3 stocks: Expected return 0.04 0.24 0.14 Stock Amount invested S25,000 $45.000 Question 3: R B -0.02 Probability RA 0.1 0.6 0.4 0.22 0.12 0.02 0.3 Calculate (a) expected return (b) standard deviation of each stock (c) form a portfolio of60% in A, and 40% in B. Compute (d) portfolio return (e) portfolio standard deviation
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