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expected return and standard deviation

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Consider the possible rates of return that you might obtain over the next year. You can invest in stock U or stock V.

state probability stock U return stock V
of economy state occurring if state occurs % ret. if st %

Recession 0.2 7% -5%
Normal 0.5 7 10
Boom 0.3 7 25

Determine the expected return and standard deviation of an equally weighted portfolio of stock U and V.

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This solution is comprised of a detailed explanation to determine the expected return and standard deviation of an equally weighted portfolio of stock U and V.

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expected return and standard dev
Consider the possible rates of return that you might obtain over the next year. You can invest in stock U or stock V.

state probability stock U return stock V
of economy state occurring if state occurs % ret. if st %

Recession ...

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