CH 11 Drill Please note this is all one question. Consider the following informa
ID: 2714419 • Letter: C
Question
CH 11 Drill
Please note this is all one question.
Consider the following information: Requirement 1: Your portfolio is invested 28 percent each in A and C and 44 percent in B. What is the expected return of the portfolio? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g.. 32.16).) Expected return of the portfolio % Requirement 2: What is the variance of this portfolio? (Do not round intermediate calculations. Round your answer to 5 decimal places (e.g.. 32.16161).) Variance of the portfolio What is the standard deviation of this portfolio? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Standard deviation %Explanation / Answer
State of Economy Probability(P) A P*A B P*B C P*C Boom 0.18 0.359 0.06462 0.459 0.08262 0.339 0.06102 Good 0.42 0.129 0.05418 0.109 0.04578 0.179 0.07518 Poor 0.32 0.019 0.00608 0.029 0.00928 -0.065 -0.0208 Bust 0.08 -0.119 -0.00952 -0.259 -0.02072 -0.099 -0.00792 Expected return 0.11536 0.11696 0.10748 Requirement 1 Stock Probability Return Expected return A 0.28 0.11536 0.032301 B 0.28 0.11696 0.032749 C 0.44 0.10748 0.047291 0.112341