Win Assignment 4 - Summer 2021 - Microsoft Word (Product Activation Failed) File Hame Insert Page Layout References Malings Review View Acrobat Calben (Boy 11 As F 21 1 . . A INTRODUCTION XXX % Cut Copy Paste Format Painter Clipboard A 1 Normal No Spacing Heacing Heading 2 Title Subtitle Subtle Emp Emphasis Intense Em. Change Styles Font Paragraph E Styles Problem 2- Risk & Return (45 marks) Assure you think a boom and a recession are equally likely to happen, a 50-50 chance of either. State of Economy Probability of State of Economy Security Returns if State Occurs Recession Boom 0.50 0.50 Security L -20% 70% Security U 30% 10% Notice that stock U earns 30% if there is a recession and 10% if there is a boom. Based on the above information: a. What is expected return on stock U? (5 marks b. What is expected return on stock L? (5 marks) What is a standard deviation for stock U? Is marks) d. What is a standard deviation for stock L? (5 marks) Assume that your group project team invested $7,000 in security Land $3,000 in security U. What is portfolio retum in Recession? (5 marks) What is portfolio return in Room? (5 marks) g. What is expected return of the portfolio? (5 marks) h. What is variance of the portfolio? (5 marks) What is standard deviation of the portfoliu? (5 marks) ) 1. i. 1 Page: 1 of 1 Warde: 764 English (US) DR = 100% U