Consider the following information:
Rate of Return If State Occurs State of Probability of Economy State of Economy Stock A Stock B Stock C Boom .20 .355 .455 .335 Good .40 .125 .105 .175 Poor .30 .015 .025 â.055 Bust .10 â.115 â.255 â.095
Requirement 1: Your portfolio is invested 30 percent each in A and C and 40 percent in B. What is the expected return of the portfolio? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)
Expected return of the portfolio %
Requirement 2:
(a) What is the variance of this portfolio? (Do not round intermediate calculations. Round your answer to 5 decimal places (e.g., 32.16161).)
Variance of the portfolio
(b) What is the standard deviation of this portfolio? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)
Standard deviation %
Consider the following information:
| Rate of Return If State Occurs | ||||||
| State of | Probability of | |||||
| Economy | State of Economy | Stock A | Stock B | Stock C | ||
| Boom | .20 | .355 | .455 | .335 | ||
| Good | .40 | .125 | .105 | .175 | ||
| Poor | .30 | .015 | .025 | â.055 | ||
| Bust | .10 | â.115 | â.255 | â.095 | ||
| Requirement 1: |
| Your portfolio is invested 30 percent each in A and C and 40 percent in B. What is the expected return of the portfolio? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) |
| Expected return of the portfolio | % |
| Requirement 2: |
| (a) | What is the variance of this portfolio? (Do not round intermediate calculations. Round your answer to 5 decimal places (e.g., 32.16161).) |
| Variance of the portfolio |
| (b) | What is the standard deviation of this portfolio? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) |
| Standard deviation | % |
Related questions
Consider the following information:
| State of | Probability of | Rate of Return If State Occurs | |||||||||||
| Economy | State of Economy | Stock A | Stock B | Stock C | |||||||||
| Boom | .19 | .354 | .454 | .334 | |||||||||
| Good | .41 | .124 | .104 | .174 | |||||||||
| Poor | .31 | .014 | .024 | â | .054 | ||||||||
| Bust | .09 | â | .114 | â | .254 | â | .094 | ||||||
Your portfolio is invested 28 percent each in A and C and 44 percent in B. What is the expected return of the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Expected return %
What is the variance of this portfolio? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., 32.16161.)
Variance
What is the standard deviation of this portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Standard deviation %
Consider the following information:
| State of | Probability of State | Rate of Return if State Occurs | |||||||||||
| Economy | of Economy | Stock A | Stock B | Stock C | |||||||||
| Boom | .72 | .10 | .04 | .40 | |||||||||
| Bust | .28 | .29 | .35 | â | .20 | ||||||||
a. What is the expected return on an equally weighted portfolio of these three stocks? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Expected return %
b. What is the variance of a portfolio invested 27 percent each in A and B and 46 percent in C? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., 32.16161.)
Variance of a portfolio
