man.4 You are going to make a portfolio consisting of 50 % of Bank of America Stock and 50% of Caterpillar Stock. You also have the following information:StateiBoomBust 20%Answer:StateiProbabilityof State iBoom80%BustAnswer:What is the expected return for the portfolio? (Answer as a percentage and Round to 2decimals)BOAReturn.34%You are going to make a portfolio consisting of 50 % of Bank of America Stock and 50% of Caterpillar Stock. You also have the following information:80%-3%20%Probability BOAof State iReturnCaterpillarReturn34 %39%-3%-2%CaterpillarReturn39%-2%What is the standard deviation for the portfolio? (Answer as a percentage and Roundto 2 decimals)

StateProbability of StateBOA returnsCaterpillars returnsBoom80%34%39%Bust20%-3%-2%Weight of…

Answered: You are going to make a portfolio…

You are going to make a portfolio consisting of 50 % of Bank of America Stock and 50 % of Caterpillar Stock. You also have the following information:

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

man.4

You are going to make a portfolio consisting of 50 % of Bank of America Stock and 50
% of Caterpillar Stock. You also have the following information:
State
i
Boom
Bust 20%
Answer:
State
i
Probability
of State i
Boom
80%
Bust
Answer:
What is the expected return for the portfolio? (Answer as a percentage and Round to 2
decimals)
BOA
Return.
34%
You are going to make a portfolio consisting of 50 % of Bank of America Stock and 50
% of Caterpillar Stock. You also have the following information:
80%
-3%
20%
Probability BOA
of State i
Return
Caterpillar
Return
34 %
39%
-3%
-2%
Caterpillar
Return
39%
-2%
What is the standard deviation for the portfolio? (Answer as a percentage and Round
to 2 decimals)

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