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2. Calculate the expected return, variance, and standard deviations of stock A, stock B, and obtain...

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Finance

2. Calculate the expected return, variance, and standarddeviations of stock A, stock B, and obtain the expected return ofan equally weighted portfolio of both (meaning 50% in A, and 50% inB). Please show all work and formulas used.

ScenarioProbabilityAB
Boom1/3-4%9%
Normal1/38%4%
Recession1/320%-4%

Answer & Explanation Solved by verified expert
3.8 Ratings (324 Votes)
Answer a Stock A Expected Return 13 004 13 008 13 020 Expected Return 008 or 800 Variance 13 004 0082 13 008 0082 13 020 0082 Variance 00096 Standard Deviation 0009612    See Answer
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2. Calculate the expected return, variance, and standarddeviations of stock A, stock B, and obtain the expected return ofan equally weighted portfolio of both (meaning 50% in A, and 50% inB). Please show all work and formulas used.ScenarioProbabilityABBoom1/3-4%9%Normal1/38%4%Recession1/320%-4%

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