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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 | .33 | .43 | .34 | ||||||||
Good | .50 | .20 | .14 | .08 | ||||||||
Poor | .30 | .01 | .09 | .03 | ||||||||
Bust | .05 | .17 | .29 | .10 |
Your portfolio is invested 32 percent each in A and C, and 36 percent in B. What is the expected return of the portfolio? Expected return =
What is the variance of this portfolio? Variance =
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