There is a 42% probability of an average economy and a 58% probability of an abo

Question

There is a 42% probability of an average economy and a 58% probability of an above average economy. You invest 44% of your money in Stock S and 56% of your money in Stock T. In an average economy the expected returns for Stock S and Stock T are 14% and 6%, respectively. In an above average economy the the expected returns for Stock S and T are 12% and 10%, respectively, what is the expected return for this two stock portfolio? Portfolio Expected Return (4 decimals): D Question 3 1 pts You are invested 16% in growth stocks with a beta of 1.6, 17% in value stocks with beta of 1.1, and 67% in the market portfolio, what is the beta of your portfolio? Portfolio Beta (1 d

Explanation / Answer

Q2) Portfolio Expectes return = 0.44*(0.42*0.14+0.58*0.12)+0.56*(0.42*0.06+0.58*0.10)

= 10.3088%

Q3) Portfolio beta = 0.16*1.6+0.17*1.1+0.67*1 = 1.1

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