Consider the following information on Stocks A, B, C andtheir returns (in decimals) in each state:StateProb. of StateABCBoom20%0.270.220.16Good45%0.160.090.07Poor25%0.0300.03Bust10%-0.08-0.04-0.02If your portfolio is invested 25% in A, 40% in B, and 35% inC, what is the standard deviation of the portfolio in percent?Answer to two decimals, carry intermediate calcs. to at leastfour decimals.

Standard deviation is measure of risk and volatility of the stock and is measured as deviation from…

Answered: State Prob. of State A B C Boom 20%…

State Prob. of State A B C Boom 20% 0.27 0.22 0.16 Good 45% 0.16 0.09 0.07 Poor 25% 0.03 0 0.03 Bust 10% -0.08 -0.04 -0.02

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Concept explainers

Cash Flow Statement Analysis

A company's cash flow is the movement of its cash inflows and cash outflows. A cash flow statement is prepared to determine changes in an organization's cash position. A cash flow statement shows how much money was generated and spent on the business during the fiscal year. The cash flow analysis is a method of analyzing an organization's investing, financing, and operating activities. A cash flow statement reveals an organization's liquidity and solvency, as well as its ability to change cash flows in the future. It eliminates the other effects of accounting methods by improving the comparability of different organizations' operational performance.

Question

Consider the following information on Stocks A, B, C and
their returns (in decimals) in each state:
State
Prob. of State
A
B
C
Boom
20%
0.27
0.22
0.16
Good
45%
0.16
0.09
0.07
Poor
25%
0.03
0
0.03
Bust
10%
-0.08
-0.04
-0.02
If your portfolio is invested 25% in A, 40% in B, and 35% in
C, what is the standard deviation of the portfolio in percent?
Answer to two decimals, carry intermediate calcs. to at least
four decimals.

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Consider the following information on Stocks A, B, C and their returns (in decimals) in each state: State Prob. of State A Boom 20% 0.34 0.21 0.16 Good 45% 0.13 0.11 0.08 Poor 25% 0.01 0.03 Bust 10% -0.1 -0.06 -0.03 If your portfolio is invested 25% in A, 40% in B, and 35% in C, what is the standard deviation of the portfolio in percent? Answer to two decimals, carry intermediate calcs. to at least four decimals.
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