Question

Given the following information:

State of Economy | Probability | Rate of Return if State Occurs Stock G | Rate of Return if State Occurs Stock H |

Boom | 0.3 | 12% | 25% |

Normal | 0.5 | 15% | 10% |

Recession | 0.2 | 6% | -18% |

Suppose you hold a portfolio with 60% invested in G and 40% invested in H.

(1) What is the portfolio’s return if each state of the economy occurs, respectively?

(2) What is the portfolio’s expected return?

(3) What is the portfolio’s standard deviation?

Answer #1

Given the following information:
State of Economy
Probability
Rate of Return if State Occurs Stock G
Rate of Return if State Occurs Stock H
Boom
0.3
12%
25%
Normal
0.5
15%
10%
Recession
0.6
6%
-18%
Suppose you hold a portfolio with 60% invested in G and 40%
invested in H.
(1) What is the portfolio’s return if each state of the economy
occurs, respectively?
(2) What is the portfolio’s expected return?
(3) What is the portfolio’s standard deviation?
Is...

1. Consider following information:
Probability of the state of economy
Rate of return if state occurs
Stock SSS
Recession
0.1
4 %
Normal
0.5
10 %
Boom
0.4
12.1 %
Calculate the expected return of a stock. Express your answer as
%.
2. Consider the same info as before:
Probability of the state of economy
Rate of return if state occurs
Stock SSS
Recession
0.1
4 %
Normal
0.5
10 %
Boom
0.4
12.1 %
Calculate the standard deviation of...

Rate of Return if State Occurs
State of Economy
Probability of State of Economy
Stock A
Stock B
Stock C
Boom
.10
.18
.48
.33
Good
.300
.11
.18
.15
Poor
.40
.05
-.09
-.05
Burst
.20
-.03
-.32
-.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?
b- What is the variance of this portfolio? The standard
deviation?

Probability of the state of economy
Rate of return if state occurs
Stock T
Recession
0.3
2 %
Boom
0.7
12 %
If you want an expected return of 6%, when holding a portfolio
invested in stock T and risk free asset. (The expected return on
risk free asset is 2%.) What percentage of stock T should you hold?
Express you answer as percent.
could you answer this in 40 minutes? thanks very much! I leave a
like

Consider the following information:
Rate of Return if State Occurs
State of Economy
Probability of State of Economy
Stock A
Stock B
Recession
.10
.05
–.23
Normal
.60
.08
.14
Boom
.30
.13
.32
Calculate the standard deviation for Stock A.
Calculate the standard deviation for Stock B.

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 .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...

Consider the following information:
Rate of Return if State Occurs
State of Economy
Probability of State of Economy
Stock A
Stock B
Recession
.10
.04
–.20
Normal
.60
.09
.13
Boom
.30
.15
.36
Calculate the expected return for Stock A.
Calculate the expected return for Stock B.
Calculate the standard deviation for Stock A.
Calculate the standard deviation for Stock B.

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
.35
.20
.41
.25
Good
.25
.11
.16
.15
Poor
.20
−.03
−.13
−.02
Bust
.20
−.17
−.20
−.11
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...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 3 minutes ago

asked 3 minutes ago

asked 4 minutes ago

asked 14 minutes ago

asked 14 minutes ago

asked 18 minutes ago

asked 18 minutes ago

asked 18 minutes ago

asked 18 minutes ago

asked 20 minutes ago

asked 27 minutes ago

asked 27 minutes ago