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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 |
| .20 |
|
| .32 |
|
| .42 |
|
| .22 |
|
| Good |
| .50 |
|
| .17 |
|
| .13 |
|
| .11 |
|
| Poor |
| .25 |
|
| .04 |
|
| .07 |
|
| .05 |
|
| Bust |
| .05 |
|
| .12 |
|
| .17 |
|
| .09 |
|
| a. Your portfolio is invested 28 percent each in A and C, and 44 percent in B. What is the expected return of the portfolio? |
b. What is the variance of this portfolio?
c. What is the standard deviation
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