Question 18 options: Use the following information to answer the two questions below. State of...
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Accounting
Question 18 options:
Use the following information to answer the two questions below.
State of Prob. of the Rate of return if state occurs
the economy state of economy Stock A Stock B
Boom 0.70 0.15 0.02
Bust 0.30 0.05 0.02
You MUST use 4 digits in every calculation you do in order for your answer to be the same as the one in the system. When entering your answer, round to the nearest 0.01% but do not enter the % sign. For example, if your answer is 3.484% enter 3.48; if your answer is 0.12013 then enter 12.01
What is the expected return of a portfolio with 60% in asset A and 40% in Asset B?
What is the variance of the portfolio with 60% in asset A and 40% in Asset B?
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