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Consider the following information: State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B Stock C Boom
Consider the following information: |
State of Economy | Probability of State of Economy | Rate of Return if State Occurs | ||
---|---|---|---|---|
Stock A | Stock B | Stock C | ||
Boom | .15 | .35 | .40 | .28 |
Good | .45 | .16 | .17 | .09 |
Poor | .30 | .01 | .03 | .01 |
Bust | .10 | .10 | .12 | .09 |
a. | 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 and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
b-1. | What is the variance of this portfolio? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161.) |
b-2. | What is the standard deviation? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
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