Suppose you thought a boom would occur 20% of the time instead of 50% (so recession probability

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Suppose you thought a boom would occur 20% of the time instead of 50% (so recession probability = 1.00 -0.20 = 0.80).

1.What are the expected returns on Starcents and Jpod in this case? If the risk-free rate is 10 percent, what are the risk premiums?

2.What is the standard deviation of Starcents and Jpod, receptively?

Suppose you invest 30% into starcents and 70% into Jpods

3.What is the expected return and the standard deviation of this portfolio?

Posted Date: May 18, 2024 11:14 PM

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Suppose you thought a boom would occur 20% of the time instead of 50% (so recession probability

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