Question

Consider the following information: Rate of Return if State Occurs State of Economy Probability of State of Economy Stock A Stock B Stock C Boom .20 .18 .45 .23 Good .20 .16 .18 .13 Poor .40 −.05 −.15 .02 Bust .20 −.15 −.35 −.11 a. Your portfolio is invested 20 percent each in Stocks A and C and 60 percent in Stock B. What is the expected return of the portfolio? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b-1. What is the variance of this portfolio? (Do not round intermediate calculations. Round your answer to 5 decimal places.) b-2. What is the standard deviation? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Answer 1