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Calculate the expected return for each stock

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Reference no: EM132652225

You are looking into putting 2 new stocks into your portolfio.

TEFLA and GAAGLE. Your stock broker has provided you with the returns for both stocks in a Bear Market, Normal Market and Bull Market the probability ofeach Market is 1/3 or 33.3333333%.

State of Economy.        TEFLA Return.            GAAGLE Return.

Bear                             9.90%                           -7.30%

Normal                          11.30%                        12.80%

Bull                                5.90%                          29.30%

Question 1: You are concerned not only with your expected return but also with the risk you are assuming on each stock. Sinceyou may put both stocks into your portfolio, you are concerend with how TEFLA and GAAGLE relate to each otherover various market scenarios. Calculate the Expected Return, Standard Deviaiton for each stock as well as the Correlation of TEFLA and GAGGLE

Reference no: EM132652225

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