Question: Question 5 (8 points) Use the following information to answer the two questions below. State of Prob. of the Rate of return if state occurs

Question 5 (8 points) Use the following information to answer the

Question 5 (8 points) Use the following information to answer the two questions below. State of Prob. of the Rate of return if state occurs Stock B Stock A the economy state of economy Boom 0.70 0.20 0.02 Bust 0.30 -0.10 0.02 You MUST use 4 digits in every calculation you do in order for your answer to be the same as the one in the system. Enter answer using 4 decimals. Do not use or enter in %. For example if your answer is 3.48% enter 0.035; if your answer is 0.12013 then enter 0.1201 What is the expected return of a portfolio with 75% in asset A and 25% in Asset B? What is the variance of the portfolio with 75% in asset A and 25% in Asset B? Page 3 of 6 Previous Page Next Page

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