State of Economy Probability of State of Economy Rate of Ret

State of Economy Probability of State of Economy Rate of Return if state occurs

Stock A Stock B Stock C

Boom .15 .37 .47 .27

Good .45 .22 .18 .11

Poor .35 -.04 -.07 -.05

Bust .05 -.18 -.22 -.08

Your portfolio is invested 20% each in stock A and C, and 60% in stock B. Given the analysis above the expected return of your portfolio is _______%, with a portfolio standard deviation of _________%.

Expected return = 10.96%

Standard dev = 17.26%

p(x)	return	p*x	p*(x - mean)^2
0.15	41.0%	0.0615	0.0135360
0.45	17.4%	0.0783	0.0018663
0.35	-6.0%	-0.021	0.0100675
0.05	-18.4%	-0.0092	0.004310048

State of Economy Probability of State of Economy Rate of Return if state occurs Stock A Stock B Stock C Boom .15 .37 .47 .27 Good .45 .22 .18 .11 Poor .35 -.04

State of Economy Probability of State of Economy Rate of Ret

Solution

Get Help Now

Submit a Take Down Notice