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Returns and Standard Deviations Consider the following information Rate of Return If State Occurs State of Economy Probability of State of Economy Stock A Stock B Stock

Returns and Standard Deviations 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

0.2

0.18

0.48

0.33

Good

0.4

0.11

0.18

0.15

Poor

0.3

0.05

-.09

-.05

Bust

0.1

-.03

-.32

-.09

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?

b. What is the variance of this portfolio? The standard deviation?

Jun 17 2020 View more View Less

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