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Consider the following information: State of Probability of State Economy of Economy Boom Bust 0.7 Rate of Return if State Occurs Stock A Stock B

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Consider the following information: State of Probability of State Economy of Economy Boom Bust 0.7 Rate of Return if State Occurs Stock A Stock B Stock C 0.05 0.01 0.50 0.10 0.12 -0.10 0.3 a) What is the expected return on an equally weighted portfolio of these three stocks? (5 marks) b) What is the variance of the return on an equally weighted portfolio of these three stocks? (6 marks)

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