You decide to invest in a portfolio consisting of 15 percent Stock X, 36 percent Stock Y,
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Question:
You decide to invest in a portfolio consisting of 15 percent Stock X, 36 percent Stock Y, and the remainder in Stock Z. Based on the following information, what is the standard deviation of your portfolio?
State of Economy Probability of State of Economy Return if State Occurs
Stock X Stock Y Stock Z
Normal 0.77 9.00% 2.40% 11.40%
Boom 0.23 16.30% 24.30% 15.80%
Related Book For
Corporate Finance
ISBN: 9780077173630
3rd Edition
Authors: David Hillier, Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan, Jeffrey F. Jaffe
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