Standard deviation of expected returns on portfolio

Assignment Help Financial Management

Reference no: EM132024211

There are three possible states of nature--boom, normality, and bust--with probabilities .2, .6, and .2. In these three states, Stock A has expected future returns of -11.3, 13.2, and 17.9 percent. Stock B has expected future returns of -12, 6.9, and 18.8 percent. What is the standard deviation of expected returns on a portfolio invested half in Stock A and half in Stock B in percent?

Reference no: EM132024211

Questions Cloud

What should current rate be on two-year treasury securities : Assume if the unbiased expectations theory is correct, what should the current rate be on two-year Treasury securities?

What is the capital asset pricing model : What is the capital asset pricing model and what does the model depend on?

What would the aftertax cost of debt be : If the receipts of the foundation were found to be taxable by the IRS. what would the aftertax cost of debt be?

What is the expected return on portfolio invested : What is the expected return on a portfolio invested half in Stock A and half in Stock B in percent?

Standard deviation of expected returns on portfolio : What is the standard deviation of expected returns on a portfolio invested half in Stock A and half in Stock B in percent?

What is the expected return on stock in percent : In these three states, Stock A has expected future returns of -12.1, 5.8, and 17.2 percent. What is the expected return on Stock A in percent?

You want to consider your interest rate exposure : You are thinking about buying a bond and you want to consider your interest rate exposure.

Suggest trading strategy for exploiting such opportunities : Suggest a trading strategy for exploiting such opportunities.

What is the dollar-weighted rate of return : What is the dollar-weighted rate of return?

User Account

All Pages