#16)

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	0.76	0.15	0.11	0.27
Bust	0.24	0.05	0.13	0.03

Requirement 1:

What is the expected return on an equally weighted portfolio of these three stocks? (Do not round your intermediate calculations.)

Requirement 2:

What is the variance of a portfolio invested 10 percent each in A and B and 80 percent in C? (Do not round your intermediate calculations.)