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sunkiss22 sunkiss22
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6 months ago
Suppose you have $20,000 to invest in two securities: Spot and Dot. After you have done an extensive analysis of the economy and the two securities, you have the following forecasts:

State of the
Economy		Probability of
Occurrence		Spot
Expected Return		Dot
Expected Return
Boom15%-6%35%
Normal60%12%20%
Bust25%18%-10%
a) What are the expected returns on Spot and Dot?
b) What are the standard deviations of the returns on Spot and Dot?
c) What is the covariance of the returns on Spot and Dot?
d) What is the correlation between Spot and Dot?
e) What is the composition of the portfolio if you wish to have an expected return of 12 percent on the portfolio?
f) What is the standard deviation of the portfolio?
Textbook 
Corporate Finance

Corporate Finance


Edition: 5th
Author:
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KFordKFord
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6 months ago
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sunkiss22 Author
wrote...

6 months ago
Thank you, thank you, thank you!
sakoon
wrote...

Yesterday
Good timing, thanks!
amandamraz
wrote...

2 hours ago
Thanks for your help!!
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