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Consider the following information on two stocks: State of the Economy Probability of State of Economy Stock 1 Rate of Return Stock 2 Rate of

Consider the following information on two stocks:

State of the Economy

Probability of State of Economy

Stock 1

Rate of Return

Stock 2

Rate of Return

Boom

.35

.12

-.28

Normal

.5

.4

.09

Bust

.15

.53

.48

If you have a portfolio that is made up of 50% of stock 1 and 50% of stock 2, what is the portfolio expected return, variance and standard deviation

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