Consider the following information:

Rate of Return If State Occurs

State of

Probability of

Economy

State of Economy

Stock A

Stock B

Stock C

Boom

.17

.352

.452

.332

Good

.43

.122

.102

.172

Poor

.33

.012

.022

.052

Bust

.07

.112

.252

.092

Requirement 1:

Your portfolio is invested 32 percent each in A and C and 36 percent in B. What is the expected return of the portfolio?

Requirement 2:

(a)

What is the variance of this portfolio?

(b)	What is the standard deviation of this portfolio?