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

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10. Returns and Standard Deviations. Consider the following information: State of Economy Probability of State of Economy Rate of Return If State Occurs Stock A Stock B Stock C .15 .35 .45 .12 Boom Good Poor Bust .10 .02 -.25 .01 -.11 .33 .17 -.05 -.09 .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? b. What is the variance of this portfolio? The standard deviation

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