What is the expected return of a portfolio that has invested $9,805 in Stock A, $18,289 in Stock B, and $6,201 in Stock C? (Hint: calculate weights of each stock first). Enter the answer with 4 decimals (e. g. 0.1234).

The expected return of the portfolio is 0.1256.

Explanation:

Note: This question is not complete. The complete question is therefore provided before answering the question as follows:

State        Probability    Stock A Return     Stock B Return    Stock C Return

Boom             0.32                  0.22                          0                        -0.07

Bust               0.68                  0.02                        0.21                       0.24

What is the expected return of a portfolio that has invested $9,805 in Stock A, $18,289 in Stock B, and   $6,201 in Stock C? (Hint: calculate weights of each stock first). Enter the answer with 4 decimals (e.g. 0.1234).

The explanation of the answer is now given as follows:

Step 1. Calculation of weights of each stock

Total investment = Amount invested in A + Amount invested in B + Amount invested in C = $9,805 + $18,289 + $6,201 = $34,295

Weight of stock A = Amount invested in A / Total investment = $9,805 / $34,295 = 0.2859

Weight of stock B = Amount invested in B / Total investment = $18,289 / $34,295 = 0.5333

Weight of stock C = Amount invested in C / Total investment = $6,201 / $34,295 = 0.1808

Step 2. Calculation of expected return of stock

Expected return of a stock = (Probability during Boom * Stock return during Boom) + (Probability during Bust * Stock return during Bust)

Expected return of stock A = (0.32 * 0.22) + (0.68 * 0.02) = 0.0840

Expected return of stock B = (0.32 * 0) + (0.68 * 0.21) = 0.1428

Expected return of stock C = (0.32 * (-0.07)) + (0.68 * 0.24) = 0.1408

Step 3. Calculation of expected return of the portfolio

Expected return of the portfolio = (Weight of stock A * Expected return of stock A) + (Weight of stock B * Expected return of stock B) + (Weight of stock C * Expected return of stock C) = (0.2859 * 0.0840) + (0.5333 * 0.1428) + (0.1808 * 0.1408) = 0.1256

Therefore, the expected return of the portfolio is 0.1256.

the answer is . a novel has no sub-plot, but a novella does

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know