Examlex

Solved

An Investor Is Considering Purchasing Two Stocks for a Portfolio

question 94

Essay

An investor is considering purchasing two stocks for a portfolio.Stock A will comprise of 40% of the portfolio and Stock B 60%.It is expected that three economics states may occur, with a 40% probability of a boom economy, 50% probability of an average economy, and a 10% probability of a bust economy.If a boom economy transpires, Stock A will yield an 11% return and Stock B 15%.An average economy will see at 7% and 11% returns for Stock A and B respectively.In a bust economy, Stock A will have a return of -20% and Stock B -5%.Given the above information, calculate the portfolio standard deviation.


Definitions:

HIV

A virus that attacks the immune system, leading to acquired immunodeficiency syndrome (AIDS) if unchecked.

Plasticity

The brain's ability to change and adapt as a result of experience and new learning.

Traumatic Brain Injury

A form of brain damage caused by a sudden impact or force to the head, potentially leading to long-term cognitive, physical, and emotional impairments.

Developmental Change

Refers to the transformations and growth that occur in human beings throughout the lifespan, encompassing physical, cognitive, and socio-emotional development.

Related Questions