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What are expected rate of return

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Reference no: EM133056723

You have a two stock portfolio with $700 in stock A and $300 in stock B.

You believe the following probability distribution exists for your stocks.

State of the Economy

Probability of State Occurring

Market Rate of Return of Stock A

Market Rate of Return of Stock B

Portfolio Return

Boom

0.3

-10%

25%

 

Normal

0.6

10%

15%

 

Recession

0.1

20%

5%

 

What are expected rate of return, risk, and CV of stock A?

Reference no: EM133056723

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