00:01
Hello students, here is a question.
00:01
What is the expected return on equity weighted portfolio comprised the following three stocks? state the economic probability of a state economic rate of return if state occurs a stock a and stock b, stock c booms 0 .25, 0 .19, 0 .13, 0 .07.
00:22
The normal will be 0 .72, 0 .15, 0 .05 and 0 .13 and the burst will be 0 .03, minus 0 .29, minus 0 .14, 0 .22.
00:37
So we have four options given here.
00:39
We have to choose the right option from this.
00:41
So let us start calculating the problem.
00:45
First we need to calculate the expected return of each stock by multiplying the probability of each state of economy by the rate of return.
01:04
So if that state occurs and this swimming those products for each of the stocks, so that will be expected returns are 0 .25 into 0 .19 plus 0 .72 into 0 .15 plus 0 .03 into minus 0 .29...