Question

What is the expected return and standard deviation of a portfolio made up of 40% of stock A and 60% of stock M, given the following information?

Stock A Stock B

Probability Expected Return Expected Return

Boom 0.30 15% 22%

Normal 0.50 12% 15%

Recession 0.20 2% -8%

Show all work.

Answer #1

Given the following information, calculate the expected return
and standard deviation for a portfolio that has 35 percent invested
in Stock A, 38 percent in Stock B, and the balance in Stock C.
(Do not round intermediate calculations. Enter your answers
as a percent rounded to 2 decimal places.)
Returns
State of
Economy
Probability of State of Economy
Stock A
Stock B
Stock C
Boom
0.50
12
%
21
%
22
%
Bust
0.50
13
0
−13
Expected Return
Standard...

Given the following information, calculate the expected return
and standard deviation for a portfolio that has 35 percent invested
in Stock A, 38 percent in Stock B, and the balance in Stock C.
(Do not round intermediate calculations. Enter your answers
as a percent rounded to 2 decimal places.)
Returns
State of Economy
Probability of State of Economy
Stock A
Stock B
Stock C
Boom
0.50
12
%
21
%
22
%
Bust
0.50
13
0
−13
Expected Return ____...

What is the standard deviation of a portfolio made up of 60%
Stock A and 40% Stock B?
5.60%
17.22%
4.88%
14.46%
22.09%
Stock
Expected Return
Beta
Variance
COV A,B
A
11%
1.2
0.06
0.04
B
15%
1.7
0.05

If your portfolio is invested 30 percent each in A and B
and 40 percent in C, what is the portfolio’s expected return and
the variance? Show work if possible.
State of Economy
Probability of State of Economy
Stock A Return (%)
Stock B Return
(%)
Stock C Return (%)
Boom
0.10
6%
30%
27%
Normal
0.50
12%
22%
13%
Recession
0.40
18%
-14%
-40%

Expected return and standard deviation for stocks A and B are
shown in the table below.
State of
Economy
Probability
of state of
the economy
Rate of return if state occurs
Stock
A
Stock
B
Recession
.2
-.10
.15
Normal
.5
.20
.22
Boom
.3
.60
.29
Expected return
.26
.227
Standard Deviation
.25
.05
1. Refer to the information in the table above. Suppose you have
$50,000 total. If you put $30,000 in Stock A and $20,000 in Stock...

What is the standard
deviation of a portfolio made up of 40% Stock A and 60% Stock
B?
Stock
Expected
Return
Beta
Standard
Deviation
Correlation
Coefficient ρ A,B
A
14%
1.5
0.36
0.9
B
11%
2.0
0.23

Based on the following
information, calculate the expected return and standard deviation
and variance for two stocks:
This is what i have so
far and i am stuck if someone can check my work so far and help me
fill in the rest thanks
State of the Economy
Probability
Rate of Return Stock A
Rate of Return Stock B
Recession
.25
.05
-.19
Normal
.50
.06
.14
Boom
.25
.10
.34
Stock A
Probability
Return
Product
Return
Deviation
Squared
Deviation...

2b. Calculate the expected return and standard deviation of a
portfolio made up of 50% stock C and 50% stock D if the correlation
is -0.75.
Probability
Stock C
Weighted Return
Expected Return
Deviation
SQd Dev.
Prob * Sqrd Deviaiton
0.3
-10%
-3.00%
12.50%
-22.50000%
0.0506
0.0151875
0.5
15%
7.50%
12.50%
2.50000%
0.0006
0.0003125
0.2
40%
8.00%
12.50%
27.50000%
0.0756
0.015125
Variance
3.06%
Standard Deviation
17.50%
Probability
Stock D
Weighted Return
Expected Return
Deviation
SQd Dev.
0.3
25%
7.50%
12.50%...

Given the table below, what is the expected return to your
portfolio? What is the standard deviation?
State Probability Return
Boom
30%
18%
Normal
60%
8%
Bad
10%
-4%

Given the following information, what is the expected rate of
return and the standard deviation for this stock?
State of Economy
Probability of State of Economy
Rate of Return
Boom
0.3
0.23
Normal
0.65
0.14
Recession
0.05
-0.36

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