Question
Consider the following information: State Probability Stock A Stock B Stock C Boom 0.65 -0.02 0.09...
Consider the following information:
State Probability Stock A Stock B Stock C
Boom 0.65 -0.02 0.09 -0.09
Bust 0.35 0.26 -0.12 -0.01
What is the expected return on an equally weighted portfolio of these three stocks? (Hint: Equally means that each stock has the same weight. Given that there are only 3 stocks, each has a weight of 1/3) Enter the answer with 4 decimals (e.g. 0.1234).
Homework Answers
Answer #1
Formulae
Formuale as above...
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Similar Questions
Consider the following information: State Probability Stock A Stock B Stock C Boom 0.65 0.01 0.16...
Consider the following information:
State Probability Stock A Stock B Stock C
Boom 0.65 0.01 0.16 0.22
Bust 0.35 0.20 -0.06 0.10
What is the expected return on an equally weighted portfolio of
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Bust 0.68 0.06 -0.01 0.21
What is the expected return of a portfolio that has invested
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Consider the following information: State Probability Stock A Stock B Stock C Boom 0.32 0 0.25...
Consider the following information:
State Probability Stock A Stock B Stock C
Boom 0.32 0 0.25 0.19
Bust 0.68 0.25 0.08 0.16
What is the expected return of a portfolio that has invested
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Consider the following information on Stocks A, B, C and their returns (in decimals) in each...
Consider the following information on Stocks A, B, C and their
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State
Prob. of State
A
B
C
Boom
20%
0.26
0.18
0.17
Good
45%
0.12
0.08
0.09
Poor
25%
0.04
0.02
0.03
Bust
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-0.1
-0.04
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If your portfolio is invested 25% in A, 40% in B, and 35% in C,
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Consider the following information on two stocks: State Prob(State) Stock A Stock B Boom 15% 0.22...
Consider the following information on two stocks:
State
Prob(State)
Stock A
Stock B
Boom
15%
0.22
-0.12
Normal
50%
0.07
0.15
Bust
35%
-0.09
0.06
1.Calculate the covariance(A,B). (Enter percentages as decimals
and round to 4 decimals)
2. Calculate the correlation(A,B). (Enter percentages as
decimals and round to 4 decimals)
consider the following information: state of economy. probability of
consider the following information:
state of economy. probability of
state of economy
boom.
0.58
bust.
0.42
rate of return if state occurs
stock A. stock
B.
stock C
0.14.
0.22.
0.40
0.14.
0.02.
- 0.09
a: what is the expected return on an equally weighted
portfolio of these three stocks?
b: what is the variance of a portfolio invested 25% each in A and B
and 50% in C?
Consider the following information: Rate of Return if State Occurs State of Economy Probability of...
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
0.74
0.07
0.29
0.09
Bust
0.26
0.15
0.15
0.05
Requirement 1:
What is the expected return on an equally weighted portfolio of
these three stocks? (Do not round your intermediate
calculations.)
Requirement 2:
What is the variance of a portfolio invested 20 percent each in
A and B and 60 percent in C?...
Consider the following information on Stocks A, B, C and their returns (in decimals) in each...
Consider the following information on Stocks A, B, C and their
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Boom 20% 0.32 0.2 0.17 Good 45% 0.12 0.09 0.08 Poor 25% 0.04 0.01
0.03 Bust 10% -0.08 -0.06 -0.01 If your portfolio is invested 25%
in A, 40% in B, and 35% in C, what is the standard deviation of the
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