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A portfolio consists of 40 percent of Stock S and 60 percent of Stock T. Stock S will return 13 percent if the economy booms
A portfolio consists of 40 percent of Stock S and 60 percent of Stock T. Stock S will return 13 percent if the economy booms and 8 percent if it is normal. Stock T will return 6 percent in a boom and 10 percent in a normal economy. The probability of a boom is 50 percent. What is the portfolio variance? .001014 .000004 .000040 .001004 .000009
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