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(solution) I have done the question and i have the answer but the teacher


I have done the question and i have the answer but the teacher told me the answer is wrong. Please someone confirm to me where is the mistakes and make changes to it


ABLA DEHAI AL MEQBALI

 

Step 1 Providing details for Available Probability and return on each stock with each scenario respectiv

 

Return on respective stocks

 

A

 

B

 

17%

 

8%

 

-3% Probability

 

Boom

 

10%

 

Normal

 

30%

 

Recession

 

60% 6%

 

10%

 

19% Step 2 In this stage we identify the amount of money invested in each stock

 

Stock A

 

$

 

30,000

 

Stock B

 

$

 

20,000

 

Stock

 

$

 

40,000

 

Total Investment

 

$

 

90,000 Step 3 Calculating Expected Values, Deviation from expected value and Square of deviation Expected Return - Boom

 

Expected Return - Normal

 

Expected Return - Recession Step 4 $

 

30,000 $

 

20,000

 

Expected value

 

Probability

 

$

 

15,100.00

 

10%

 

$

 

28,400.10

 

30%

 

$

 

9,100.19

 

60% Calculating Expected Return of Portfolio, variance and Standard Deviations

 

Expected Return on Portpolio

 

Variance of the portpolio $

 

$ Standard deviation of the portfoli $ 15,490.14

 

74,514,218 8,632 Please note all the calculation formulaes are done unde EQBALI ck with each scenario respectively C

 

22%

 

15%

 

-25% $

 

40,000

 

Deviation from expected va Square of deviation

 

$

 

(390.14) 152212.34074

 

$

 

12,909.96 166666963.92

 

$

 

(6,389.95) 40831512.122 ulaes are done under the values

 


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DATE ANSWERED

Sep 13, 2020

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