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Calculate the expected return and standard deviation for a

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Reference no: EM131099717

Problem

Given the following information, calculate the expected return and standard deviation for a portfolio that has 32 percent invested in Stock A, 31 percent in Stock B, and the balance in Stock C.

   

Returns

State of

Probability of

      

Economy

State of Economy

Stock A

Stock B

Stock C

Boom

.40

17%

20%

23%

Bust

.60

18

0

–18

  Expected return

%

  Standard deviation

%

a) Calculation of Expected return on portfolio?

b) Calculation of Standard deviation of portfolio?

Reference no: EM131099717

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