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Portfolio A Probability Return 0.22 -4% 0.50 18% 0.28 23% Click on the icon in order to copy its contents int .The expected rate of return for portfolio A is %

Portfolio A Probability Return 0.22 -4% 0.50 18% 0.28 23% Click on the icon in order to copy its contents int .The expected rate of return for portfolio A is %

Calculus For The Life Sciences
Calculus For The Life Sciences
2nd Edition
ISBN:9780321964038
Author:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Publisher:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Chapter13: Probability And Calculus
Section13.CR: Chapter 13 Review
Problem 23CR
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(Computing the expected rate of return and risk) After a tumultuous period in the stock market, Logan Morgan is considering an investment in one of two portfolios. Given the information that follows, which investment is better, based on risk (as measured by the standard deviation) and return as measured by the expected rate of return? Portfolio A Portfolio B Probability 0.22 Return -4% Probability Return 0.12 6% 0.50 18% 0.28 10% 0.28 23% 0.35 13% 0.25 17% (Click on the icon in order to copy its contents into a spreadsheet.) a. The expected rate of return for portfolio A is %. (Round to two decimal places.)
Transcribed Image Text:(Computing the expected rate of return and risk) After a tumultuous period in the stock market, Logan Morgan is considering an investment in one of two portfolios. Given the information that follows, which investment is better, based on risk (as measured by the standard deviation) and return as measured by the expected rate of return? Portfolio A Portfolio B Probability 0.22 Return -4% Probability Return 0.12 6% 0.50 18% 0.28 10% 0.28 23% 0.35 13% 0.25 17% (Click on the icon in order to copy its contents into a spreadsheet.) a. The expected rate of return for portfolio A is %. (Round to two decimal places.)
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