Author Question: Suppose that you hold a two-asset portfolio consisting of 100 shares of Clooney Brothers at $33 per ... (Read 41 times)

Garrulous · **on:** Apr 25, 2021

Question 1

If Microsoft stockholders expect either a 25% return or a 2% return, each with a 50% probability, and Apple Computer shareholders expect a 10% return with certainty, what is the expected return from a portfolio comprised of equal amounts of stock from both firms?
◦ 37.00%
◦ 23.50%
◦ 11.75%
◦ 10.75%
◦ 12.33%

Question 2

Suppose that you hold a two-asset portfolio consisting of 100 shares of Clooney Brothers at $33 per share and 100 shares of Marx Brothers at $42 per share. Assume that you have computed the expected return on Clooney Brothers and Marx Brothers to be 20% and 12%, respectively. What is the expected return from the portfolio?
◦ 20.0%
◦ 16.0%
◦ 15.5%
◦ 12.0%
◦ 13.5%

angrybirds13579 · **Reply #1 on:** Apr 25, 2021

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