Problem 11-11 Given the following information, calculate the expected return and
ID: 2711058 • Letter: P
Question
Problem 11-11
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.)
Returns
State of
Probability of
Economy
State of Economy
Stock A
Stock B
Stock C
Boom
.50
8
%
21
%
24
%
Bust
.50
11
0
–11
Expected return
%
Standard deviation
%
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
ANSWER:
We are 95% confident that the actual mean difference between the appraised values and selling prices of all the houses sold in Grand Rapids is between -$3785 and $561.