Suppose you have $20,000 total. If you put $14,000 in Stock A and the remainder in Stock B, what will be the expected return on your portfolio? State of Economy Return on A Return on B Probability 0.2 Recession -20% 30% Normal 0.5 10% 20% Boom 0.3 70% O a. 10.90% O b. 14.50% O c. 28.50% d. 24.70% 50%
Suppose you have $20,000 total. If you put $14,000 in Stock A and the remainder in Stock B, what will be the expected return on your portfolio? State of Economy Return on A Return on B Probability 0.2 Recession -20% 30% Normal 0.5 10% 20% Boom 0.3 70% O a. 10.90% O b. 14.50% O c. 28.50% d. 24.70% 50%
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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Transcribed Image Text:QUESTION 7
Suppose you have $20,000 total. If you put $14,000 in Stock A and the remainder in Stock B, what will be the expected return on your portfolio?
State of Economy
Probability
Return on A
Return on B
Recession
0.2
-20%
30%
Normal
0.5
10%
20%
Boom
0.3
70%
50%
O a. 10.90%
O b. 14.50%
O c. 28.50%
Od. 24.70%
O a. 18.01%
O b. 26.61%
O c. 20.75%
O d. 24.32%
what will be the standard deviation on your portfolio?
27
2 F
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