Question: Use the following information to answer the two questions below. State of Prob. of the Rate of return if state occurs the economy state of

Use the following information to answer the two questions below. State of Prob. of the Rate of return if state occurs the economy state of economy Stock A Stock B 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 %. 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? A What is the variance of the portfolio with 75% in asset A and 25% in Asset B
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
