Consider the following information: a. Your portfolio is invested 24 percent eac

Question

Consider the following information: a. Your portfolio is invested 24 percent each in A and C, and 52 percent in B. What is the expected return of the portfolio? ( Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g.. 32.16.) b-1 What is the variance of this portfolio? ( Do not round intermediate calculations and round your answer to 5 decimal places. e.g.. 32.16161.) b-2What s the standard deviation? (Do not round Intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Explanation / Answer

Prob Stock A Stock B Stock C Expected Value Deviation from expected value square square*probabiliy boom 0.15 0.38 0.48 0.28 0.352 25.63% 6.5669187600% 0.00985 good 0.45 0.22 0.19 0.15 0.1764 8.07% 0.6506035600% 0.002928 poor 0.3 -0.04 -0.09 -0.06 -0.0624 -15.81% 2.5008259600% 0.007502 bust 0.1 -0.16 -0.34 -0.11 -0.1772 -27.29% 7.4496243600% 0.00745 Er-Expected return 12.80% 9.65% 8.05% 2.77% Variance 16.65% Standard deviation A 24% in A&C and 52% in C 9.57% B Variance 2.77% c SD 16.65%

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