Intro The table below shows the expected rates of return for three stocks and their weights in some portfolio: Stock A Portfolio weights 0.4 Stock B 0.2 Stock C 0.4 State Probability Expected returns Recession 0.2 0.03 0.05 -0.05 Normal Boom 0.5 0.06 0.09 0.02 0.3 0.11 0.11 0.1 Part 1 What is the expected portfolio return? 3+ decimals Submit Attempt 1/2 for 10 pts. Part 2 What is the standard deviation of the portfolio returns? Attempt 1/2 for 10 pts. 4+ decimals Submit

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter3: Risk And Return: Part Ii
Section: Chapter Questions
Problem 3P: Two-Asset Portfolio Stock A has an expected return of 12% and a standard deviation of 40%. Stock B...
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Intro
The table below shows the expected rates of return for three stocks and their weights in some portfolio:
Stock A
Portfolio weights
0.4
Stock B
0.2
Stock C
0.4
State
Probability
Expected returns
Recession
0.2
0.03
0.05
-0.05
Normal
Boom
0.5
0.06
0.09
0.02
0.3
0.11
0.11
0.1
Part 1
What is the expected portfolio return?
3+ decimals
Submit
Attempt 1/2 for 10 pts.
Part 2
What is the standard deviation of the portfolio returns?
Attempt 1/2 for 10 pts.
4+ decimals
Submit
Transcribed Image Text:Intro The table below shows the expected rates of return for three stocks and their weights in some portfolio: Stock A Portfolio weights 0.4 Stock B 0.2 Stock C 0.4 State Probability Expected returns Recession 0.2 0.03 0.05 -0.05 Normal Boom 0.5 0.06 0.09 0.02 0.3 0.11 0.11 0.1 Part 1 What is the expected portfolio return? 3+ decimals Submit Attempt 1/2 for 10 pts. Part 2 What is the standard deviation of the portfolio returns? Attempt 1/2 for 10 pts. 4+ decimals Submit
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