Given the following information, what is the variance of the returns on a portfolio that is invested 40 percent in both Stocks A and B, and 20 percent in Stock C?

State of Economy Probability of Rate of Return if State Occurs

State of Economy Stock A Stock B Stock C

Normal 0.87 13.4% 17.6% 9.3%

Recession 0.13 2.2% -28.5% 11.2%

	A.	0.002102
	B.	0.002490
	C.	0.002513
	D.	0.005746