Calculate the Expected Return, Variance, and Standard Deviations for Investments

question 68

Essay

Calculate the expected return, variance, and standard deviations for investments in either stock A or stock B, or an equally weighted portfolio of both.
$$\begin{array} { | l | c | c | c | } \hline { \text { Scenario } } & \text { Probability } & \text { Return an A } & \text { Return an B } \\\hline \text { Recession } & 25 \% & - 4 \% & 9 \% \\\hline \text { Nonmal } & 40 \% & 8 \% & 4 \% \\\hline \text { Boom } & 35 \% & 20 \% & - 4 \% \\\hline\end{array}$$

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Definitions:

Primary Component

The most essential or chief element that plays a central role in the system or structure it is part of.