Consider the following information:

Rate of Return if State Occurs State of Probability of State Economy of Economy Stock A Stock B Stock C Boom .72 .10 .04 .30 Bust .28 .19 .25 .10

Required:

(a)

What is the expected return on an equally weighted portfolio of these three stocks? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Expected return %

(b)

What is the variance of a portfolio invested 27 percent each in A and B and 46 percent in C? (Do not round intermediate calculations. Round your answer to 5 decimal places (e.g., 32.16161).)

Variance of a portfolio