11. An exhaustive financial analysis has produced the following returns on two investments under three different scenarios:
Expected Returns
Scenario Probability Stock X Stock Y
S1 0.3 10% 8%
S2 0.4 16% 15%
S3 0.3 12% 20%
a. Calculate the expected return on each investment.
b. Calculate the standard deviations (σ) for both X and Y.
c. Calculate the coefficient of variation (CV) for both X and Y.
d. If you were to create a portfolio consisting of 67% of Stock X and 33% of Stock Y, what will be the expected return (rP) and the standard deviation (σP) for your portfolio?