Question

Total Value Weight Stock Return Recession (50%) Normal (30%) $ 4,600 23% 15% 10% $ 4,400...

Total Value

Weight

Stock Return

Recession

(50%)

Normal

(30%)

$ 4,600

23%

15%

10%

$ 4,400

22%

1%

15%

$ 7,500

37.5%

8%

18%

$ 2,500

12.5%

-2%

5%

    $ 1,000

5%

3%

12%

Calculate the overall expected return of the portfolio assuming that the probability of a recession is equal to 50%.

Calculate the standard deviation of the portfolio.

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