Question

# Problem 11-10 Returns and Standard Deviations [LO 1, 2] Consider the following information: State of Probability...

Problem 11-10 Returns and Standard Deviations [LO 1, 2]

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 .360 .460 .340 Good .41 .130 .110 .180 Poor .31 .020 .030 ? .066 Bust .09 ? .120 ? .260 ? .100

Your portfolio is invested 30 percent each in A and C and 40 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             %

#### Earn Coins

Coins can be redeemed for fabulous gifts.