Weight of Stock A = 25%
Weight of Stock B = 35%
Weight of Stock C = 40%
Boom:
Expected Return = 0.25 * 0.17 + 0.35 * 0.06 + 0.40 * 0.22
Expected Return = 0.1515
Normal:
Expected Return = 0.25 * 0.08 + 0.35 * 0.10 + 0.40 * 0.15
Expected Return = 0.1150
Recession:
Expected Return = 0.25 * (-0.03) + 0.35 * 0.19 + 0.40 *
(-0.25)
Expected Return = -0.0410
Expected Return of Portfolio = 0.05 * 0.1515 + 0.55 * 0.1150 +
0.40 * (-0.0410)
Expected Return of Portfolio = 0.0544 or 5.44%
Variance of Portfolio = 0.05 * (0.1515 - 0.0544)^2 + 0.55 *
(0.1150 - 0.0544)^2 + 0.40 * (-0.0410 - 0.0544)^2
Variance of Portfolio = 0.0061316825
Standard Deviation of Portfolio = (0.0061316825)^(1/2)
Standard Deviation of Portfolio = 0.0783 or 7.83%
2) What is the expected return and standard deviation of a portfolio that is invested in...
What is the standard deviation of the returns on a portfolio that is invested in Stocks A, B, and C? Twenty percent of the portfolio is invested in Stock A and 35 percent is invested in Stock C. Probability of State of Rate of Return State of Economy Economy if State Occurs Stock Stock A Stock B Boom 04 .17 .09 .09 Normal .81 .08 .06 Recession .15 - 24 .02 - a. 3.28% O b. 4.91% OC 5.65% O...
What is the standard deviation of the returns on a portfolio that is invested in Stocks A, B, and C? Twenty percent of the portfolio is invested in Stock A and 35 percent is invested in Stock C. State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B Stock C Boom .04 .17 .09 .09 Normal .81 .08 .06 .08 Recession .15 − .24 .02 − .13
6. Calculating Expected Return Based on the following information, calculate the expected return. State of EconomyProbability of State of EconomyRate of Return if State OccursRecession.15-.12Normal.60.10Boom.25.277. Calculating Returns and Standard Deviations Based on the following information, calculate the expected returns and standard deviations for the two stocks. State of EconomyProbability of State of EconomyRate of Return if State OccursStock AStock BRecession.10.02-.30Normal.50.10.18Boom.40.15.3110. Returns and Standard Deviations Consider the following information: State of EconomyProbability of State of EconomyRate of Return if State OccursStock AStock BStock CBoom.15.33.45.33Good.55.11.10.17Poor.20.02.02-.05Bust.10-.12-.25-.09a. Your...
4. Given the following information, what is the standard deviation of the returns on a portfolio that is invested 35 percent in both Stocks A and C, and 30 percent in Stock B?* State of Probability of Rate of Return If State Occurs Economy State of Economy Stock AStockB Stock C 16.4% 31.8% Boom .20 11.4% Normal 7.3% 11.2% .80 19.6%
Given the following information, calculate the expected return and standard deviation for a portfolio that has 27 percent invested in Stock A, 28 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.) Returns State of Economy Boom Bust Probability of State of Economy 0.30 0.70 Stock A 16% 17 Stock B 19% Stock C 26% -17 Expected return Standard deviation
10. What is the expected return and standard deviation of a portfolio comprised of $7,500 in stock M and $5000 in stock N and covariance of M and N is 20%? (20 Points) State of Probability of Returns if State Occurs Economy State of Economy Stock M Stock N Boom 10% 18% 10% Normal 75% 7% 8% Recession 15% -20% 6%
Given the following information, calculate the expected return and standard deviation for a portfolio that has 29 percent invested in Stock A, 23 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.) Returns State of Economy Probability of State of Economy Stock A Stock B Stock C Boom 0.30 12 % 19 % 22 % Bust 0.70 15 0 −15 Expected Return =...
Given the following information, what is the standard deviation of the returns on a portfolio that is invested 40 percent in stock A, 35 percent in stock B, andthe remainder in stock C?State of Economy Prob. of State of Economy Rate of Return is state occursNormal .65 Stock A-14.3% Stock B- 16.7% Stock C- 18.2%Recession .35 -9.8% 5.4% -26.9%
Given the following information, calculate the expected return and standard deviation for a portfolio that has 52 percent invested in Stock A, 19 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.) Returns State of Economy Boom Bust Stock C Probability of State of Economy 0.80 0.20 Stock A 11% 14 Stock B 18% 21% -14 Expected return Standard deviation
19. You own the following portfolio of stocks. What is the portfolio weight of stock C? Number Stock of Shares 500 200 600 100 Price per Share $14 $23 $18 $47 A. 39.85 percent B. 42.86 percent C. 44.41 percent D. 48.09 percent E. 52.65 percent 20. What is the variance of the returns on a portfolio that is invested 60 percent in stock S and 40 percent in stock T? State of Economy Boom Normal Probability of State of...