Use the following table of information: Stock X Stock Y Expected Return 14% 18% Standard Deviation 40% 54% Beta 1.20 1.50 Correlation (X,Y) = 0,25 %3D What is the expected return for a portfolio with 60% invested in X and 40% invested in Y? O 14.4% O 14.8% O 15.6% O 16,1% O None of above

Consider the following data State of Nature Prob. Stock A Return Boom 0.3 16.00% Normal 0.6 14.20% Recession 0.1 8.00%  What is the expected return for Stock A? Group of answer choices 14.12% 12.14% 15.12% 14.00%

Consider the following stock return scenarios for three stocks: Stock Stock A B Economy Up Average Down 8% 5% 0% 2% 3% 4% Stock с 12% 0% -5% If each state of the economy is equally likely, calculate the expected return and population standard deviation for a portfolio invested entirely in Stock A. Which stock should be added to the portfolio to reduce risk?

Given the following information on a investment portfolio: Stock Name Expected returns $invested in stock Standard deviation of returntesla 15.5% 3750 10.3%microsoft 9.8% 5000 5.6%pfizer 13.8% 1250 12% Which stock should have the most systematic risk?

Consider the following expected returns, volatilities, and correlations: Stock Duke Energy Microsoft Wal-Mart Expected Standard Correlation with Correlation with Correlation with Return Duke Energy Deviation 14% 6% 44% 24% 23% 14% 1.0 -1.0 0.0 Microsoft -1.0 1.0 0.7 Wal-Mart 0.0 0.7 1.0 a) Consider a portfolio consisting of only Duke Energy and Microsoft. What is the percentage of your investment (portfolio weight) that you would place in Duke Energy stock to achieve a risk-free investment. b) What are the expected return and volatility of a portfolio that consists of a long position of $10,000 in Wal-Mart and a short position of $2000 in Microsoft? c) What are the expected return and platility of a portfolio that has $3000 invested in Duke Energy, $4000 invested in Microsoft, and $3000 invested in Walmart stock?

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