Problemyou have a portfolio worth 50000 consisting of two, Ask an Expert

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Problem:

You have a portfolio worth $50,000 consisting of two stocks, A and B. You invested $20,000 in stock A. Consider the following information:

State of economy	Probability	Return on A	Return on B
Growth	.30	10%	20%
Normal	.5	15%	4%
Recession	.2	-12%	0%

Required:

Question 1: What is the expected return for A? for B?

Question 2: What is the standard deviation for A? for B?

Question 3: What is the expected return and standard deviation for the portfolio?

Question 4: What is the correlation between A and B? are there benefits to forming a portfolio of these two securities?

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91148745

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