Question

a. The expected rate of return for portfolio A is

The standard deviation of portfolio A is

a. The expected rate of return for portfolio B is

The standard deviation of portfolio B is

Score: 0 of 1 pt | 4 of 9 (2 complete) HW Score: 22.22%, 2 of 9 pts P8-7 (similar to) :& Question Help (Computing the expected rate of return and risk) After a tumultuous period in the stock market, Logan Morgan is considering an investment in one of two portfolios. Given the information that follows, which investment is better, based on risk (as measured by the standard deviation) and return as measured by the expected rate of return? Portfolio A Portfolio B Probability 0.15 0.53 0.32 Return - 1% 17% 23% Probability 0.05 0.28 0.42 0.25 Return 6% 9% 13% 15% a. The expected rate of return for portfolio A is 16.22 %. (Round to two decimal places.) The standard deviation of portfolio A is 27.77 %. (Round to two decimal places.) Enter your answer in the answer box and then click Check Answer.

Answer 1

the expected return of X = 16.22%

standard deviation of X (s.d) = 7.71%

the expected return of Y= 12.03%

standard deviation of Y (s.d) = 3.51%

P x PX x-x - 17.224. 0.78 - 0.15 - 1% p(x-x)² 44.44926 0.3224 14. 709 [x = 16.22 %. 0.53 17% 9.01 7.36 x = √59.512 6.78 23y x = 7.71%) X= 16.22% 0x 59.512%2 (expecteden) leerun V=) Represents Standard deviatin 19 - 12.03.) E l -0.05 1 0.28 0.42 112.347 9 P4 yŲ P(4-4)² 6 0.3 -11.98 7.17 9 2.52 -3.03 2.57 13 5.46 0.97 0.395 15 3.75 2.97 2.20 5- T= 12.031. 12.34772 luye 3,51) 3.51 2 ( expected Return)

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