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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
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 | .364 | .464 | .344 | ||
Good | .43 | .134 | .114 | .184 | ||
Poor | .33 | .024 | .034 | .089 | ||
Bust | .07 | .124 | .264 | .104 |
Requirement 1: |
Your portfolio is invested 28 percent each in A and C and 44 percent in B. What is the expected return of the portfolio?(Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimalplaces(e.g., 32.16).) |
Expected return of the portfolio | % |
Requirement 2: |
(a) | What is the variance of this portfolio?(Do not roundintermediate calculations.Round your answer to 5 decimal places(e.g., 32.16161).) |
Variance of the portfolio |
(b) | What is the standard deviation of this portfolio?(Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimalplaces(e.g., 32.16).) |
Standard deviation | % |
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