You have just graduated from college and your parents have g…
You have just graduated from college and your parents have gifted you $12,000 as a graduation present. You have decided to allocate your funds between two stock funds. You have determined that you will invest 62% of your funds into a large cap stock fund, and the rest in a small cap stock fund. Analysts have predicted the following outcomes for these funds over the next year: Economy Probability Large Cap Return Small Cap Return Below Average 57% 5.6% 3.1% Above Average 43% 15.3% 16.3% What is the expected return on the large cap fund? (Answer in percentage terms and round answer to 2 decimal places. Do not round intermediate calculations) [LCR] What is the expected return on the small cap fund? (Answer in percentage terms and round answer to 2 decimal places. Do not round intermediate calculations) [SCR] What is the standard deviation on the large cap fund? (Answer in percentage terms and round answer to 2 decimal places. Do not round intermediate calculations) [LCSD] What is the standard deviation on the small cap fund? (Answer in percentage terms and round answer to 2 decimal places. Do not round intermediate calculations) [SCSD] What is the expected return on your portfolio? (Answer in percentage terms and round answer to 2 decimal places. Do not round intermediate calculations) [PR] What is the standard deviation on your portfolio? (Answer in percentage terms and round answer to 2 decimal places. Do not round intermediate calculations) [PSD]
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