1. Consider the following states of outcomes, probabilities, and expected returns on only stocks three stocks in your portfolio; X, Y, and Z. State Probability X Y Boom 0.15 16% 10% 22% Semi-Boom ??...

1. Consider the following states of outcomes,<br>probabilities, and expected returns on only stocks<br>three stocks in your portfolio; X, Y, and Z.<br>State<br>Probability X<br>Y<br>Boom<br>0.15<br>16%<br>10%<br>22%<br>Semi-Boom<br>??<br>14%<br>8%<br>18%<br>Normal<br>0.50<br>10%<br>6%<br>14%<br>Mild-Recession<br>0.10<br>5%<br>4%<br>-10%<br>Full-Recession<br>0.10<br>-3%<br>2%<br>-12%<br>a. What is the expected return of the portfolio if $25,000<br>is invested in X, $35,000 in Y, and $30,000 invested in<br>stock Z?<br>b. What are the standard deviations of stocks X, Y, and Z?<br>

Extracted text: 1. Consider the following states of outcomes, probabilities, and expected returns on only stocks three stocks in your portfolio; X, Y, and Z. State Probability X Y Boom 0.15 16% 10% 22% Semi-Boom ?? 14% 8% 18% Normal 0.50 10% 6% 14% Mild-Recession 0.10 5% 4% -10% Full-Recession 0.10 -3% 2% -12% a. What is the expected return of the portfolio if $25,000 is invested in X, $35,000 in Y, and $30,000 invested in stock Z? b. What are the standard deviations of stocks X, Y, and Z?

Jun 11, 2022

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1. Consider the following states of outcomes, probabilities, and expected returns on only stocks three stocks in your portfolio; X, Y, and Z. State Probability X Y Boom 0.15 16% 10% 22% Semi-Boom ??...

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