Consider the following information: Rate of Return If State Occurs State of Probability of Economy State of Economy boom is -66 and Bust is .34 Stock A Stock B Stock C are Boom .12 .21 .39 Bust .20 .08 .08

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 percent rounded to 2 decimal places, e.g., 32.16.) Expected return 18.11 %

b. What is the variance of a portfolio invested 22 percent each in A and B and 56 percent in C? (Do not round intermediate calculations and round your answer to 6 decimal places, e.g., 32.161616.)