100038050_HW11 - Boom 36.90% Good 12.10% Poor-7.20%...

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Problem 8 20% in stock G, 8% expected return 70% in stock J, 15% expected return 10% in stock K, 24% expected return Portfolio's expected return = 14.5% The expected return of the portfolio is the weighted average of the expected returns of each asset. The owner of the portfolio would expect to get a return of 14.5% Problem 10 The portfolio return in each state of the economy:
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Unformatted text preview: Boom 36.90% Good 12.10% Poor-7.20% Bust-16.50% Portfolio's expected return = 13.29% Variance = 0.031713 Standard deviation = 17.81% Problem 11 25% in stock Q, beta 0.6 20% in stock R, beta 1.7 15% in stock S, beta 1.15 40% in stock T, beta 1.9 Portfolio Beta = 1.42...
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