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Expected Return problem Consider the following portfolio: state Prob A 25% B 35% C 40% Boom 0.23 0.45 0.30 0.32 0.12 0.45 0.10 Good 0.15

Expected Return problem

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Consider the following portfolio: state Prob A 25% B 35% C 40% Boom 0.23 0.45 0.30 0.32 0.12 0.45 0.10 Good 0.15 poor 0.10 0.03 -0.12 -0.05 bust 0.15 -0.15 -0.25 0.02 Please calculate: a) The expected returns of stock A,B, and C. b) The variance of stock A. c) The covariance of stock B and C. d) The expected return of the portfolio e) The variance of the portfolio

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