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Consider the following information: Rate of Return if State Occurs State of Economy Probability of State of Economy Stock A Stock B Stock C Boom
Consider the following information: |
Rate of Return if State Occurs | ||||
State of Economy | Probability of State of Economy | Stock A | Stock B | Stock C |
Boom | .20 | .44 | .39 | .44 |
Good | .30 | .13 | .10 | .13 |
Poor | .24 | .05 | .02 | .05 |
Bust | .26 | -.03 | -.07 | -5.95 |
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 your intermediate calculations. Note: All rates are given in decimal format here!) |
(Click to select) -28.43% -34.75% -33.17% -17.00% -31.59% |
Requirement 2: |
(a) | What is the variance of this portfolio? (Do not round your intermediate calculations.) |
(Click to select) .6608 .7066 .7651 .2319 .6956 |
(b) | What is the standard deviation? (Do not round your intermediate calculations.) |
(Click to select) 48.15% 87.57% 83.40% 79.23% 84.06% |
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