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		.19			.366			.466			.346
Good		.41			.136			.116			.186
Poor		.31			.026			.036		−	.091
Bust		.09		−	.126		−	.266		−	.106

Your portfolio is invested 31 percent each in A and C and 38 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             %

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