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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 | .25 | .19 | .35 | .32 | ||||||||||||||||
Good | .15 | .14 | .24 | .15 | ||||||||||||||||
Poor | .10 | .05 | -.07 | -.07 | ||||||||||||||||
Bust | .50 | -.06 | -.28 | -.09 | ||||||||||||||||
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? (Round your answer to 2 decimal places. Omit the "%" sign in your response.) |
Expected return | % |
b-1. | What is the variance of this portfolio? (Round your answer to 5 decimal places.) |
Variance of this portfolio |
b-2. | The standard deviation? (Round your answer to 2 decimal places. Omit the "%" sign in your response.) |
Standard deviation | % |
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