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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 .15 .40 .50 .30
Good .60 .16 .10 .09
Poor .20 .02 .05 .03
Bust .05 .18 .25 .11
a.

Your portfolio is invested 25 percent each in A and C, and 50 percent in B. What is the expected return of the portfolio?

b-1 What is the variance of this portfolio?

b-2 What is the standard deviation?

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