Question

Expected return and standard deviation. Use the following information to answer the questions.

State of Economy		Probability of State		Return on Asset R in State		Return on Asset S in State		Return on Asset T in State
Boom		0.28		0.040		0.250		0.470
Growth		0.39		0.040		0.100		0.300
Stagnant		0.25		0.040		0.150		0.015
Recession		0.08		0.040		−0.040		−0.160

a.  What is the expected return of a portfolio with equal investment in all three​ assets? (round to four decimal places)

b.  What is the​ portfolio's variance and standard​ deviation? (round to four decimal places)

Answer 1