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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 | .35 | .45 | .33 | ||
Good | .50 | .12 | .10 | .17 | ||
Poor | .25 | .01 | .02 | ?.05 | ||
Bust | .10 | ?.11 | ?.25 | ?.09 |
Requirement 1: |
Your portfolio is invested 30 percent each in A and C and 40 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 decimal places
Requirement 2: |
(a) | What is the variance of this portfolio? (Do not round intermediate calculations. Round your answer to 5 decimal places
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