Question

Consider the following information: Rate of Return if State Occurs State of Probability of Economy State of Economy Stock A Stock B Stock C Boom .10 .35 .40 .27 Good .60 .16 .17 .08 Poor .25 − .01 − .03 − .04 Bust .05 − .12 − .18 − .09 a. Your portfolio is invested 30 percent each in A and C, and 40 percent in B. What is the expected return of the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b-1. What is the variance of this portfolio? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161.) b-2. What is the standard deviation? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Answer #1

Consider the following information:
Rate of Return if State Occurs
State of
Probability of
Economy
State of Economy
Stock A
Stock B
Stock C
Boom
.10
.35
.40
.27
Good
.60
.16
.17
.08
Poor
.25
−
.01
−
.03
−
.04
Bust
.05
−
.12
−
.18
−
.09
a.
Your portfolio is invested 30 percent each in A and C, and 40
percent in B. What is the expected return of the portfolio?
(Do not round...

Consider the following information:
Rate of Return if State Occurs
State of
Probability of
Economy
State of Economy
Stock A
Stock B
Stock C
Boom
.10
.35
.40
.27
Good
.60
.16
.17
.08
Poor
.25
−
.01
−
.03
−
.04
Bust
.05
−
.12
−
.18
−
.09
a.
Your portfolio is invested 30 percent each in A and C, and 40
percent in B. What is the expected return of the portfolio?
(Do not round...

Consider the following
information:
Rate of Return if State Occurs
State of
Probability of
Economy
State of Economy
Stock A
Stock B
Stock C
Boom
.15
.31
.41
.21
Good
.60
.16
.12
.10
Poor
.20
–
.03
–
.06
–
.04
Bust
.05
–
.11
–
.16
–
.08
a.
Your portfolio is invested 30 percent each in A and
C, and 40 percent in B. What is the expected
return of the portfolio? (Do not round...

Consider the following information:
Rate of Return If State Occurs
State of
Probability of
Economy
State of Economy
Stock A
Stock B
Stock C
Boom
.15
.33
.43
.23
Good
.55
.18
.14
.12
Poor
.25
−.05
−.08
−.06
Bust
.05
−.13
−.18
−.10
a.
Your portfolio is invested 26 percent each in A and C, and 48
percent in B. What is the expected return of the portfolio?
(Do not round intermediate calculations and enter your
answer...

Consider the
following information:
Rate of Return If State Occurs
State of
Probability of
Economy
State of Economy
Stock A
Stock B
Stock C
Boom
.15
.33
.45
.33
Good
.55
.11
.10
.17
Poor
.20
.02
.02
−.05
Bust
.10
−.12
−.25
−.09
a.
Your portfolio is invested 25 percent each in A and C and 50
percent in B. What is the expected...

Consider the following information:
Rate of Return if State Occurs
State of Economy
Probability of State of Economy
Stock A
Stock B
Stock C
Boom
.30
.20
.36
.27
Good
.35
.17
.24
.09
Poor
.20
−.01
−.09
−.04
Bust
.15
−.09
−.20
−.10
a. Your portfolio is invested 30 percent each
in Stocks A and C and 40 percent in Stock B. What is the expected
return of the portfolio? (Do not round intermediate
calculations. Enter your answer as...

Consider the following information:
State of
Probability of
Rate of Return If State Occurs
Economy
State of Economy
Stock A
Stock B
Stock C
Boom
.19
.366
.466
.346
Good
.41
.136
.116
.186
Poor
.31
.026
.036
−
.091
Bust
.09
−
.126
−
.266
−
.106
Your portfolio is invested 31 percent each in A and C and 38
percent in B. What is the expected return of the portfolio?
(Do not round intermediate calculations and enter your...

Consider the following
information:
Rate of Return If State Occurs
State of
Probability of
Economy
State of Economy
Stock A
Stock B
Stock C
Boom
.18
.359
.459
.339
Good
.42
.129
.109
.179
Poor
.32
.019
.029
−.065
Bust
.08
−.119
−.259
−.099
Requirement
1:
Your portfolio is invested 28 percent each in A and C and 44
percent in B. What is the...

Consider the following information on a portfolio of three
stocks:
State of
Economy
Probability of
State of Economy
Stock A
Rate of Return
Stock B
Rate of Return
Stock C
Rate of Return
Boom
.15
.04
.33
.55
Normal
.60
.09
.13
.19
Bust
.25
.15
–.14
–.28
a.
If your portfolio is invested 40 percent each in A and B and 20
percent in C, what is the portfolio’s expected return? The
variance? The standard deviation? (Do not...

Consider the following information:
Rate of Return if State Occurs
State of
Probability of
Economy
State of Economy
Stock A
Stock B
Recession
.10
.04
−
.17
Normal
.60
.09
.12
Boom
.30
.17
.27
a.
Calculate the expected return for Stocks A and B. (Do
not round intermediate calculations and enter your answers as a
percent rounded to 2 decimal places, e.g., 32.16.)
b.
Calculate the standard deviation for Stocks A and B.
(Do not round intermediate...

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