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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 | 0.70 | 0.19 | 0.29 | 0.05 |
| Bust | 0.30 | 0.15 | 0.11 | -0.01 |
| a. What is the expected return on an equally weighted portfolio of these three stocks? |
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| b. What is the variance of a portfolio invested 10 percent each in A and B and 80 percent in C? |
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The Foundations Of Business Analysis
Authors: M Douglas Berg
1st Edition
1465222030, 9781465222039
