18. What is the standard deviation of the returns on a portfolio that is invested in stocks A, B, and C? 20 percent of the portfolio is invested in stock A and 45 percent is invested in stock C. State of Economy Probability of Returns if State Occurs Stock C 11% 8% -13% State of Economy Stock A Stock B Вoom 20% 9% Normal Bust 55% 25% 4% -2% 3% 5% 10%

18. What is the standard deviation of the returns on a portfolio that is invested in stocks A, B, and C? 20 percent of the portfolio is invested in stock A and 45 percent is invested in stock C. State of Economy Probability of Returns if State Occurs Stock C 11% 8% -13% State of Economy Stock A Stock B Вoom 20% 9% Normal Bust 55% 25% 4% -2% 3% 5% 10%

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter3: Risk And Return: Part Ii

Section: Chapter Questions

Problem 3P: Two-Asset Portfolio Stock A has an expected return of 12% and a standard deviation of 40%. Stock B...

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Two-Asset Portfolio Stock A has an expected return of 12% and a standard deviation of 40%. Stock B has an expected return of 18% and a standard deviation of 60%. The correlation coefficient between Stocks A and B is 0.2. What are the expected return and standard deviation of a portfolio invested 30% in Stock A and 70% in Stock B?
18. What is the standard deviation of the returns on a portfolio that is invested in stocks A, B, C? 25 percent of the portfolio is invested in stock A and 45 percent is invested in stock C. and State of Economy Probability of Returns if State Occurs State of Economy | Stock A Stock B Stock C Boom 5% 21% 8% 28% Normal 70% 10% 13% 19% Bust 25% -3% 24% -31%
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