Given the following information, calculate the expected return and standard devi
ID: 2635054 • Letter: G
Question
Given the following information, calculate the expected return and standard deviation for a portfolio that has 37 percent invested in Stock A, 34 percent in Stock B, and the balance in Stock C. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)
Given the following information, calculate the expected return and standard deviation for a portfolio that has 37 percent invested in Stock A, 34 percent in Stock B, and the balance in Stock C. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)
Explanation / Answer
State of Economy Boom Bust Total Probability of State of Economy 0.50 0.50 Return Stock A 8.00% 11.00% Stock B 21.00% 0.00% Stock C 24.00% -11.00% Weights Stock A 37.00% 37.00% Stock B 34.00% 34.00% Stock C 29.00% 29.00% Weighted Return Stock A 2.96% 4.07% Stock B 7.14% 0.00% Stock C 6.96% -3.19% Total 17.06% 0.88% Probability Weighted Return 8.53% 0.44% 8.97% cenario Probability Return Probability Weighted Return Difference Square Root Difference Probability x Square Root Difference Boom 50.00% 17.06% 8.97% 8.09% 0.65% 0.33% Bust 50.00% 0.88% 8.97% -8.09% 0.65% 0.33% Variance 0.65% Standard Deviation Square Root of Variance) 0.08
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