Calculate the expected return. (Round your answer to 2 decimal places. (e.g., 32

Question

Calculate the expected return. (Round your answer to 2 decimal places. (e.g., 32.16))

Calculate the expected return for the two stocks. (Round your answers to 2 decimal places. (e.g., 32.16))

Calculate the standard deviation for the two stocks. (Do not round intermediate calculations andround your final answers to 2 decimal places. (e.g., 32.16))

Your portfolio is invested 25 percent each in A and C, and 50 percent in B. What is the expected return of the portfolio? (Round your answer to 2 decimal places. (e.g., 32.16))

b. What is the variance of this portfolio? (Do not round intermediate calculations and round your answer to 5 decimal places. (e.g., 32.16161))

c. What is the standard deviation? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

8. You own a stock portfolio invested 25 percent in Stock Q, 20 percent in Stock R, 35 percent in Stock S, and 20 percent in Stock T. The betas for these four stocks are 0.90, 1.23, 1.07, and 1.25, respectively. What is the portfolio beta? (Round your answer to 2 decimal places. (e.g., 32.16))

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Explanation / Answer

5. expected return = 0.19*(-0.15) + 0.55*0.16 + 0.26*0.24= 12.19%

6

Expected return of A = 0.15*4% + 0.61*7% + 0.24*12%= 7.75%

Standard deviation of A =sqrt (0.15*(4%-7.75%)^2 + 0.61*(7% -7.75%)^2+ 0.24*(12%-7.75%)^2)= 2.61%

Expected return of B =0.15*(-15%) + 0.61*14% + 0.24*31%= 13.73%

Standard deviation of B = sqrt(0.15*(-15%-13.73%)^2 + 0.61*(14% -13.73%)^2+ 0.24*(31%-13.73%)^2)= 13.98%

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