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refer to the table of data below and answer the questions that follow economic state probability of...

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Finance

refer to the table of data below and answer the questions thatfollow

economic state probability of economic state return on stock Jreturn on stock K

bear 0.25 -0.02 0.034

normal 0.60 0.138 0.062

bull 0.15 0.218 0.092

calculate the expected return of each stock

if a portfolio was created with from 30% of stock j and 70% ofstock k what is the expected return of the portfolio?

calculate the standard deviation of each stock?

calculate the covariance between the two stocks

calculate the correlation coefficient between the two stocks

what is the portfolio standard deviation?

Answer & Explanation Solved by verified expert
4.3 Ratings (935 Votes)
Stock J Scenario Probability Return rate of return probability Bear 025 2 05 Normal 06 138 828 Bull 015 62 093 Expected return sum of weighted return 871 Standard deviation of Stock J Stock K Scenario Probability Return rate of return probability Bear 025 34 085 Normal 06 62 372 Bull 015 92 138 Expected return    See Answer
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