question archive You own three stocks and have estimated the following joint probability distribution of returns: Market Condition Probability of Occurence Return on Stock A Return on Stock B Return on Stock C Return on Stock D Growth 35% 10 80 90 30 Normal 40% 40 20 10 30 Recession 25% 80 -10 -30 30 a
You own three stocks and have estimated the following joint probability distribution of returns: Market Condition Probability of Occurence Return on Stock A Return on Stock B Return on Stock C Return on Stock D Growth 35% 10 80 90 30 Normal 40% 40 20 10 30 Recession 25% 80 -10 -30 30 a
Subject:FinancePrice:3.86 Bought30
You own three stocks and have estimated the following joint probability distribution of returns:
|
Market Condition |
Probability of Occurence |
Return on Stock A |
Return on Stock B |
Return on Stock C |
Return on Stock D |
|
Growth |
35% |
10 |
80 |
90 |
30 |
|
Normal |
40% |
40 |
20 |
10 |
30 |
|
Recession |
25% |
80 |
-10 |
-30 |
30 |
a. Calculate the portfolio’s expected return and standard deviation if you invest 35% in Stock A, 35% in Stock B, 30% in Stock C. .
b. Calculate the portfolio’s expected return and standard deviation if you invest 25% in Stock A, 25% in Stock B, 25% in Stock C, 25% in Stock D,.
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