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Consider the following information on a portfolio of three stocks: State of Economy Probability of State of Economy Stock A Rate of Return Stock B
Consider the following information on a portfolio of three stocks: |
State of Economy | Probability of State of Economy | Stock A Rate of Return | Stock B Rate of Return | Stock C Rate of Return |
Boom | .14 | .05 | .35 | .47 |
Normal | .52 | .13 | .25 | .23 |
Bust | .34 | .19 | .24 | .38 |
If your portfolio is invested 42 percent each in A and B and 16 percent in C, what is the portfolios expected return, the variance, and the standard deviation? (Do not round intermediate calculations. Round your variance answer to 5 decimal places (e.g., 32.16161) and input your other answers as a percentage rounded to 2 decimal places (e.g., 32.16).)
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