Use the following table of states of the economy and stock returns to calculate the expected return on a portfolio of 49 percent Roten and the rest in Bradley.

		Security if State	Returns Occurs
	Prob of State of Economy	Roten	Bradley
Bust	0.8	-12%	29%
Boom	?	46	7

QUESTION 2

Use the following table of states of the economy and stock returns to calculate the percentage standard deviation of a portfolio of a portfolio of 80 percent Roten and the rest in Bradley.

		Security if State	Returns Occurs
	Prob of State of Economy	Roten	Bradley
Bust	0.2	-12%	30%
Boom	?	37	5

QUESTION 3

Use the following information to calculate the percentage expected return a portfolio that is 39.7 percent invested in 3 Doors, Inc., and the rest invested in Down Co.:

	3 Dorrs, Inc.	Down Co.
Expected return	23%	13%
Standard deviation	39	9
Correlation	88

QUESTION 4

Use the following information to calculate the percentage standard deviation of a portfolio that is 72.5 percent invested in 3 Doors, Inc., and the rest invested in Down Co.:

	3 Dorrs, Inc.	Down Co.
Expected return	16%	9%
Standard deviation	50	32
Correlation	0.35

Answer rating: 100% (QA)

Question 1 The expected return on a portfolio of 49 percent Roten and the rest in Bradley is 125 This is calculated as follows Expected return probabi... View the full answer