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What is the expected rate of return-standard deviation

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Reference no: EM132758704

You are the investment manager in Texaco Ltd, and you are considering the investments in POP Ltd and SOS Ltd. The following projected performance for the next four (4) years is supplied by a fund manager:

State of the economy Probability POP Ltd (%) SOS Ltd ( %)

Strong 0.25 50 11

Normal 0.50 16 17

Weak 0.25 ( -6) 28

(I) What is the expected rate of return, standard deviation, and coefficient of variation for each of these two investments?

(iii) You plan to invest 45% in POP Ltd and 55% in SOS Ltd. What are the covariance, portfolio return and standard deviation of this portfolio?

Reference no: EM132758704

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