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What is the expected return of a portfolio with 20% in asset A and 80% in Asset B? What is the variance of the portfolio with 20% in asset A and 80% in Asset B?

What is the expected return of a portfolio with 20% in asset A and 80% in Asset B? What is the variance of the portfolio with 20% in asset A and 80% in Asset B?

Essentials of Business Analytics (MindTap Course List)
Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Chapter15: Decision Analysis
Section: Chapter Questions
Problem 24P: Translate the following monetary payoffs into utilities for a decision maker whose utility function...
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State of the economy Boom Bust 0.05 0.02 You MUST use 4 digits in every calculation you do in order for your answer to be the same as the one in the system. When entering your answer, round to the nearest 0.01% but do not enter the % sign. For example, if your answer is 3.484% enter 3.48; if your answer is 0.12013 then enter 12.01 What is the expected return of a portfolio with 20% in asset A and 80% in Asset B? What is the variance of the portfolio with 20% in asset A and 80% in Asset B? Prob. of the state of economy 0.75 0.25 Rate of return if state occurs Stock A Stock B 0.15 0.02
Transcribed Image Text:State of the economy Boom Bust 0.05 0.02 You MUST use 4 digits in every calculation you do in order for your answer to be the same as the one in the system. When entering your answer, round to the nearest 0.01% but do not enter the % sign. For example, if your answer is 3.484% enter 3.48; if your answer is 0.12013 then enter 12.01 What is the expected return of a portfolio with 20% in asset A and 80% in Asset B? What is the variance of the portfolio with 20% in asset A and 80% in Asset B? Prob. of the state of economy 0.75 0.25 Rate of return if state occurs Stock A Stock B 0.15 0.02
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