Question: USE EXCEL AND SHOW HOW TO GET NEXT STEP INSTEAD OF SHOWING NO WORK PROBLEM 4: Based on the following data; State of the Economy

USE EXCEL AND SHOW HOW TO GET NEXT STEP INSTEAD OF

USE EXCEL AND SHOW HOW TO GET NEXT STEP INSTEAD OF SHOWING NO WORK

PROBLEM 4: Based on the following data; State of the Economy Recession Low Growth Normal Growth Boom Probability 0.2 0.25 0.40 0.15 Stock A Rate of Return Stock B Rate of Return 5% -20% 10% 10% 5% 15% 20% 60% (a) calculate the expected return and the standard deviation of returns for each stock (Stock A and Stock B). (b) Calculate the expected return and the standard deviation on the portfolio (Portfolio I), where the portfolio is formed by investing 50% of the funds in Stock A and the rest in Stock B. (c) Calculate the expected return and the standard deviation on the portfolio, (Portfolio II) where the portfolio is formed by investing 35% of the funds in Stock A and the rest in Stock B

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