Question
Consider the following information on returns and probabilities: Invest 0 of your money in Asset A...
Consider the following information on returns and probabilities:
Invest 0 of your money in Asset A and 100%in Asset B.
State Probability A B
Boom .25 12% 4%
Bust .75 6% 18%
What is the expected return for the portfolio?
|
a. 1.7 |
||
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b. 2.9 |
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c. 3.9 |
||
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d. 14.5 |
||
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e. 15.5 |
||
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f. 16.9 |
||
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g. 7.5 |
||
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h. 9.0 |
||
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i. 8.2 |
||
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j. 11 |
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