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Homework answers / question archive / There are three economy situations and two stocks
There are three economy situations and two stocks. Information is as follows. Assume you have $10,000 and allocate $4,000 on stock A. Economy Stock A Stock B Booming 0.3 10% 20% Neutral ? 5% 0% Recession 0.5 0% —10% [Answer format: keep 1 digit after decimal point in %. For example,1.56% —=~ 1.6%} a. What are the expected returns for both stock A and B respectively? b. What is the standard deviations" risk for stock A? c. What is the expected portfolio? d. What is the portfolio return when economy is booming?
