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7.1 Consider the following information: Rate of Return if State Occurs State of Economy Probability of State of Economy Stock A Stock B Stock C
7.1
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 | .25 | .37 | .47 | .27 |
Good | .50 | .21 | .18 | .12 |
Poor | .20 | .05 | .08 | .05 |
Bust | .05 | .15 | .33 | .10 |
|
Requirement 1: |
Your portfolio is invested 25 percent each in A and C, and 50 percent in B. What is the expected return of the portfolio? (Do not round your intermediate calculations.) |
(Click to select)22.76%30.06%16.06%12.66%19.56% |
Requirement 2: |
(a) | What is the variance of this portfolio? (Do not round your intermediate calculations.) |
(Click to select).63152.3315-.76851.2315.0315 |
(b) | What is the standard deviation? (Do not round your intermediate calculations.) |
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