E(Rp).ppt - 0.0003 Boom 0.50 0.05 0.088-0.04 Sum: 1.00 Sum...

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Calculating Expected Portfolio Returns: (1) (2) (3) (4) (5) (6) A A B Return if Portfolio Contribution Return if State of Prob. State Weight Product: State Economy of State Occurs in Starcents: (3) x (4) Occurs Boom 0.30 17% 0.60 10.20% 1% Normal 0.50 10% 0.60 6.00% 8% Recession 0.20 -2% 0.60 -1.20% 16% Sum: 1.00 PORTFOLIO E(Ri) 9.70% 0.60 7.50% 1 2 3 1*3 Boom 0.30 10.60% 0 0 Normal 0.50 9.20% 0 0 Recession 0.20 5.20% 0 0 8.82% 0 Calculating Variance of Expected Portfolio Returns: (1) (2) (3) (4) (5) (6) Return if State of Prob. State Expected Difference: Squared: Economy of State Occurs: Return: (3) - (4) (5) x (5) Recession 0.50 0.11 0.088 0.02
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Unformatted text preview: 0.0003 Boom 0.50 0.05 0.088-0.04 Sum: 1.00 Sum is Variance: Standard Deviation: R s,p [R s,p-E(R p )] 2 E(R p ) (7) (8) (9) (10) B Portfolio Portfolio Contribution Return Weight Product: Sum: Product: in Jpod: (6) x (7) (5) + (8) (2) x (9) 0.40 0.400% 10.60% 3.18% 0.40 3.200% 9.20% 4.60% 0.40 6.400% 5.20% 1.04% Sum is Expected Portfolio Return: 8.82% 0.40 8.82% 1.91% (7) Product: (2) x (6) 0.00016 0.00066 0.00081 0.029 Var(R p ) SD(R p )...
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This note was uploaded on 09/08/2010 for the course BUS 172A at San Jose State.

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E(Rp).ppt - 0.0003 Boom 0.50 0.05 0.088-0.04 Sum: 1.00 Sum...

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