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weight .3 debt and .7 equity

Use the following information to answer the next three questions: State Prob. R Ra Boom 0.30 40% -20% Normal 0.40 30 10 Bust 0.30 12 32 In addition, we have the following information: E(R) = 27.60 % ; E (Ra) = 7.60 % ; 0A- 11.02%; On = 20.23%; 0 -214.56 (or -0.021456); PAB= -0.9624 R-6%; RM-16%, BA= 2.16 and Be.16. 20. Fundamental and Powerful Concept 08: The standard deviation of portfolio, P above is... a. 2.49% b. 14.70% c. 7.99% d. 16.55% e. 6.21% 21. Fundamental and Powerful Concept 09: Assume that the correct answer to the above question is 7.50%, the benefit of diversification in portfolio, P is ..... a. 7.20% b. 23.14% c. 15.63% d. -214.56 Use the following information to answer the next three questions: State Prob. R Ra Boom 0.30 40% -20% Normal 0.40 30 10 Bust 0.30 12 32 In addition, we have the following information: E(R) = 27.60 % ; E (Ra) = 7.60 % ; 0A- 11.02%; On = 20.23%; 0 -214.56 (or -0.021456); PAB= -0.9624 R-6%; RM-16%, BA= 2.16 and Be.16. 20. Fundamental and Powerful Concept 08: The standard deviation of portfolio, P above is... a. 2.49% b. 14.70% c. 7.99% d. 16.55% e. 6.21% 21. Fundamental and Powerful Concept 09: Assume that the correct answer to the above question is 7.50%, the benefit of diversification in portfolio, P is ..... a. 7.20% b. 23.14% c. 15.63% d. -214.56

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