Consider the following information: State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B Stock C .12 .06 .37 .26 .32 Boom Bust .69 .31 -.17 a. What is the expected return on a equally weighted portfolio of these three stocks? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 de b. What is the variance of a portfolio invested 24 percent each in A and B and 52 percent in C? Note: Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16 a. Expected return 16.89%
Consider the following information: State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B Stock C .12 .06 .37 .26 .32 Boom Bust .69 .31 -.17 a. What is the expected return on a equally weighted portfolio of these three stocks? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 de b. What is the variance of a portfolio invested 24 percent each in A and B and 52 percent in C? Note: Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16 a. Expected return 16.89%
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 6P
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