Question

Consider the following information:

State of	Probability of			Rate of Return If State Occurs
Economy	State of Economy			Stock A			Stock B			Stock C
Boom		.15			.362			.462			.342
Good		.45			.132			.112			.182
Poor		.35			.022			.032		?	.068
Bust		.05		?	.122		?	.262		?	.102

Your portfolio is invested 32 percent each in A and C and 36 percent in B. What is the expected return of the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Expected return 11.33 %

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            

What is the standard deviation of this portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Standard deviation             %

Answer 1