Consider the following information: |
Rate of Return If State Occurs | ||||||||||||
State of | Probability of | |||||||||||
Economy | State of Economy | Stock A | Stock B | Stock C | ||||||||
Boom | .15 | .33 | .43 | .23 | ||||||||
Good | .55 | .18 | .14 | .12 | ||||||||
Poor | .25 | −.05 | −.08 | −.06 | ||||||||
Bust | .05 | −.13 | −.18 | −.10 | ||||||||
a. |
Your portfolio is invested 26 percent each in A and C, and 48 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.) |
b-1. | What is the variance of this portfolio? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161.) |
b-2. | What is the standard deviation? (Do not round interme |
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