Question

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 | 0.25 | 0.23 | 0.39 | 0.26 |

Good | 0.15 | 0.12 | 0.15 | 0.16 |

Poor | 0.30 | –0.02 | –0.12 | –0.03 |

Bust | 0.30 | –0.18 | –0.18 | –0.11 |

**a.** Your portfolio is invested 35 percent each
in A and C and 30 percent in B. What is the expected return of the
portfolio? **(Do not round intermediate calculations. Enter
your answer as a percent rounded to 2 decimal places.)**

**b-1.** What is the variance of this portfolio?
**(Do not round intermediate calculations. Round your answer
to 5 decimal places.)**

Answer #1

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 0.30 0.23 0.31 0.30 Good 0.15 0.16 0.11 0.12
Poor 0.30 0.02 –0.08 –0.07 Bust 0.25 –0.22 –0.24 –0.13 a. Your
portfolio is invested 25 percent each in A and C and 50 percent in
B. What is the expected return of the portfolio? (Do not round
intermediate calculations. Enter your answer as a percent...

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
0.25
0.18
0.32
0.25
Good
0.20
0.12
0.22
0.09
Poor
0.40
–0.03
–0.11
–0.02
Bust
0.15
–0.11
–0.16
–0.10
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. Enter
your answer as a percent...

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
0.10
0.18
0.48
0.33
Good
0.30
0.11
0.18
0.15
Poor
0.40
0.05
?0.09
?0.05
Bust
0.20
?0.03
?0.32
?0.09
a. Your portfolio is invested 25 percent each
in A and C and 50 percent in B. What is the expected return of the
portfolio? (Do not round intermediate calculations. Enter
your answer as a percent...

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
0.35
0.18
0.29
0.31
Good
0.15
0.17
0.10
0.11
Poor
0.40
0.03
–0.07
–0.08
Bust
0.10
–0.23
–0.22
–0.13
a. Your portfolio is invested 35 percent each
in A and C and 30 percent in B. What is the expected return of the
portfolio? (Do not round intermediate calculations. Enter
your answer as a percent...

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
0.25
0.18
0.37
0.27
Good
0.15
0.13
0.14
0.15
Poor
0.40
–0.01
–0.11
–0.04
Bust
0.20
–0.19
–0.16
–0.13
a. Your portfolio is invested 40 percent each
in A and C and 20 percent in B. What is the expected return of the
portfolio? (Do not round intermediate calculations. Enter
your answer as a percent...

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
0.20
0.20
0.33
0.29
Good
0.30
0.15
0.12
0.13
Poor
0.20
0.01
–0.09
–0.06
Bust
0.30
–0.21
–0.26
–0.13
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. Enter
your answer as a percent...

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
0.40
0.18
0.40
0.29
Good
0.25
0.15
0.22
0.11
Poor
0.30
0.01
–0.09
–0.06
Bust
0.05
–0.07
–0.24
–0.09
a. Your portfolio is invested 20 percent each
in A and C and 60 percent in B. What is the expected return of the
portfolio? (Do not round intermediate calculations. Enter
your answer as a percent...

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
0.70
0.13
0.11
0.13
Bust
0.30
0.09
0.13
0.03
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...

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
0.20
0.19
0.46
0.32
Good
0.40
0.12
0.19
0.14
Poor
0.10
0.04
–0.09
–0.05
Bust
0.30
–0.04
–0.30
–0.09
a. Your portfolio is invested 20 percent each
in A and C and 60 percent in B. What is the expected return of the
portfolio? (Do not round intermediate calculations. Enter
your answer as a percent...

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 0.20 0.19 0.38 0.28 Good 0.25 0.16 0.23 0.10
Poor 0.10 0.00 –0.09 –0.05 Bust 0.45 –0.08 –0.22 –0.10
a. Your portfolio is invested 25 percent each in A and C and 50
percent in B. What is the expected return of the portfolio? (Do not
round intermediate calculations. Enter your answer as a percent...

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