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Consider the following information: Rate of Return if State Occurs State of Economy Probability of State...

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 0.20 0.19 0.38 0.28 Good 0.25 0.16 0.23 0.10 Poor 0.10 0.00 –0.09 –0.05 Bust 0.45 –0.08 –0.22 –0.10

a. Your portfolio is invested 25 percent each in A and C and 50 percent in 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.)

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