# Rate of Return if State Occurs

Anonymous

Question description

 Consider the following information:

 Rate of Return if State Occurs State of Probability of Economy State of Economy Stock A Stock B Stock C Boom 0.15 0.35 0.45 0.27 Good 0.55 0.16 0.10 0.08 Poor 0.25 − 0.01 − 0.06 − 0.04 Bust 0.05 − 0.12 − 0.20 − 0.09

 a. Your portfolio is invested 30 percent each in A and C, and 40 percent in B. What is the expected return of the portfolio? (Round your answer to 2 decimal places. (e.g., 32.16))

 Expected return %

 b-1 What is the variance of this portfolio? (Do not round intermediate calculations and round your answer to 5 decimal places. (e.g., 32.16161))

 Variance

 b-2 What is the standard deviation? (Do not round intermediate calculations and round your answer to 2 decimal places. (e.g., 32.16))

 Standard deviation %

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