Consider the following informationstate of the economy, Ask an Expert

Finance

Consider the following information:

State of the economy Probability of the Economy Stock A Stock B St ock C

Boom 0.25 0.35 0.45 0.25

Normal 0.50 0.20 0.25 0.15

POOR 0.25 -0.10 -0.15 -0.10

a. Calculate the Expected returns of the stocks individually.

b. Now, you have the expected values of the stocks, assume that, Your portfolio is invested 30% each in stock A and stock B. What is the return of the portfolio?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92869197

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