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Suppose your expectations regarding the returns of Stock A and B are as follows: State of the economy Probability Return

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Suppose your expectations regarding the returns of Stock A and B are as follows:

State of the economyProbabilityReturn AReturn B
Boom?20%10%
Recession40%-7%1%


If you decide to invest 80% in stock A and the remaining in stock B, what would be your portfolio expected return? What would be your portfolio standard deviation?

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Answer rating: 100% (QA)

To calculate the portfolio expected return and standard deviation you can use the following formulas View the full answer


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Related Book For  answer-question
Intermediate Financial Management

Intermediate Financial Management

ISBN: 978-1111530266

11th edition

Authors: Eugene F. Brigham, Phillip R. Daves

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Posted Date: September 01, 2023 07:55:21
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