Calculate the e(r) and standard deviation

Reference no: EM13891435

Q#3. Expected returns and three states of the economy are below for White and Black .

Asset	PV per Share	Recession	Normal	Expansion
White Corp	$5.00	-20%	18%	50%
Black Corp	$12.50	-15%	20%	10%

The probabilities are:

State	Probability
Recession	0.2
Normal	0.5
Expansion	0.3

A). Calculate the E(R) and standard deviation for each stock

B). Calculate portfolio weights for 200 shares of White and 80 shares of Black.

C). What is the E (R) for this portfolio.

Reference no: EM13891435

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