Rate of return on the portfolio in each scenario
Not what you're looking for?
Portfolio Analysis (LO3)
Rate of Return
Scenario Probability Stocks Bonds
Recession .20 −3% +18 %
Normal economy .60 +19 +9
Boom .20 +28 +5
Consider a portfolio with weights of .6 in stocks and .4 in bonds.
a. What is the rate of return on the portfolio in each scenario? (Do not round intermediate calculations. Round your answers to 1 decimal place.)
Scenario Rate of Return
Recession _________%
Normal economy _______%
Boom _________%
b. What are the expected rate of return and standard deviation of the portfolio? (Do not round intermediate calculations. Round your answers to 2 decimal places).
Expected rate of return _________%
Standard deviation ____________%.
Purchase this Solution
Solution Summary
Solution helps in estimating rate of return on the portfolio in each scenario.
Purchase this Solution
Free BrainMass Quizzes
Operations Management
This quiz tests a student's knowledge about Operations Management
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.
IPOs
This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.