Question
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 | .358 | .458 | .338 | ||
Good | .43 | .128 | .108 | .178 | ||
Poor | .33 | .018 | .028 | ?.062 | ||
Bust | .07 | ?.118 | ?.258 | ?.098 | ||
Requirement 1: |
Your portfolio is invested 29 percent each in A and C and 42 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 (e.g., 32.16).) |
Expected return of the portfolio | % |
Requirement 2: |
(a) | What is the variance of this portfolio? (Do not round intermediate 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 decimal places (e.g., 32.16).) |
Standard deviation | % |
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