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What are expected rate of return

    Assignment Instructions

    Assignment ID: FG133056723

    You have a two stock portfolio with $700 in stock A and $300 in stock B.

    You believe the following probability distribution exists for your stocks.

    State of the Economy

    Probability of State Occurring

    Market Rate of Return of Stock A

    Market Rate of Return of Stock B

    Portfolio Return

    Boom

    0.3

    -10%

    25%

     

    Normal

    0.6

    10%

    15%

     

    Recession

    0.1

    20%

    5%

     

    What are expected rate of return, risk, and CV of stock A?

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