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Ms. Smith wants to invest in two securities, ABC and PQR, andthe relevant information is below:State of the EconomyProbabilityReturn on ABC (%)Return on PQR (%)Bear0.25-15%4%Moderate0.55%4%Bull0.2520%4%Calculate expected returns and standard deviations of twosecurities.Ms. Smith shorts $1,000 of PQR and invests all proceeds fromthis short sale as well as $3,000 of her own money into ABC. Whatis the expected return and the standard deviation of herportfolio?show formula and explanation
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