Expected Return and Variance

timer Asked: Nov 16th, 2015

Question description

Rate of Return If State Occurs

 State of

Probability of


State of Economy

Stock A

Stock B

Stock C




.23 .42




.08 -.09


What is the expected return on an equally weighted portfolio of these three stocks? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

 Expected return



What is the variance of a portfolio invested 24 percent each in A and B and 52 percent in C? (Do not round intermediate calculations and round your answer to 6 decimal places, e.g., 32.161616.)



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