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consider the following information: state of economy. probability of                                

consider the following information:
state of economy. probability of
                                  state of economy

boom.                        0.58            
bust.                           0.42
rate of return if state occurs
stock A.        stock B.           stock C
0.14.                0.22.                 0.40
0.14.                0.02.                - 0.09

a: what is the expected return on an equally weighted portfolio of these three stocks?
b: what is the variance of a portfolio invested 25% each in A and B and 50% in C?

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