Consider the following information: Probability of State- State of Economy of Economy Boom Good Poor Bust 15 .55 .25 .05 a. Expected return b-1. Variance b-2. Standard deviation Rate of Return if State Occurs Stock A Stock B Stock C .39 .49 .29 15 .20 .08 -.09 -.24 -.01 -.20 a. Your portfolio is invested 24 percent each in A and C, and 52 percent in B. What the expected return of the portfolio? (Do not round intermediate calculations a enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b-1. What is the variance of this portfolio? (Do not round intermediate calculations an round your answer to 5 decimal places, e.g., .16161.) b-2. What is the standard deviation? (Do not round intermediate calculations and ent your answer as a percent rounded to 2 decimal places, e.g., 32.16.) % -.07 -.10 %

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
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Consider the following information:
State of Economy
Boom
Good
Poor
Bust
Probability of State-
of Economy
a.
15
.55
.25
.05
a. Expected return
b-1. Variance
b-2. Standard deviation
Rate of Return if State Occurs
Stock A Stock B Stock C
.39
.49
.29
.15
.20
.08
-.09
-.07
-.24
-.10
Your portfolio is invested 24 percent each in A and C, and 52 percent in B. What
the expected return of the portfolio? (Do not round intermediate calculations a
enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
b-1. What is the variance of this portfolio? (Do not round intermediate calculations an
round your answer to 5 decimal places, e.g., .16161.)
b-2. What is the standard deviation? (Do not round intermediate calculations and ent
your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
-.01
-.20
%
%
Transcribed Image Text:Consider the following information: State of Economy Boom Good Poor Bust Probability of State- of Economy a. 15 .55 .25 .05 a. Expected return b-1. Variance b-2. Standard deviation Rate of Return if State Occurs Stock A Stock B Stock C .39 .49 .29 .15 .20 .08 -.09 -.07 -.24 -.10 Your portfolio is invested 24 percent each in A and C, and 52 percent in B. What the expected return of the portfolio? (Do not round intermediate calculations a enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b-1. What is the variance of this portfolio? (Do not round intermediate calculations an round your answer to 5 decimal places, e.g., .16161.) b-2. What is the standard deviation? (Do not round intermediate calculations and ent your answer as a percent rounded to 2 decimal places, e.g., 32.16.) -.01 -.20 % %
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