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2. Consider the following information: State of Probability of Economy State of Economy Rate of Return if State Occurs Stock A M .20 Boom Good

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2. Consider the following information: State of Probability of Economy State of Economy Rate of Return if State Occurs Stock A M .20 Boom Good in .35 Poor 30 -.05 .09 25 15 Bust a. Your portfolio is invested 30 percent each in A and C , and 40 percent in B . Whatis the expected return of the portfolio? b. What is the variance of this portfolio? The standard deviation

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