Multiple Choice

• .01265

• .00872

• .00937

• .00984

• .01059

You decide to invest in a portfolio consisting of 22 percent Stock A, 45 percent Stock B, and the remainder in Stock C. Based on the following information, what is the variance of your portfolio? State of Economy Recession Normal Probability of State of Economy .125 .687 .188 Return if State Occurs Stock A Stock B Stock C - 11.20% - 4.60% -13.60% 10.50% 10.88% 18.00% 21.77% 25.55% 30.25% Boom