You have invested $4,500 in stock S and $3,000 in stock T.
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Question:
You have invested $4,500 in stock S and $3,000 in stock T.
Returns if State Occurs
State of Economy Probability Stock S Stock T
Boom 10% 12% 4%
Normal 65% 9% 6%
Recession 25% 2% 9%
1. Calculate the expected return, variance and standard deviation for the two stocks?
2. What is the expected return, variance and standard deviation of the portfolio?
Related Book For
Fundamentals of Investments, Valuation and Management
ISBN: 978-1259720697
8th edition
Authors: Bradford Jordan, Thomas Miller, Steve Dolvin
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