PROBLEM 2 (18 POINTS) Consider the following information: Rate of Retur if State Occurs: State of Probability of Stock A Stock B Stock C Economy State Occurring (96) (%) (96) Growth 25 11.8 19.6 23.7 Stagnant .75 10.4 12.9 10.3 What is the expected return and variance of a portfolio invested 35 percent each in Stocks A and B and 30 percent in Stock C? a ANSWER: (A). Portfolio Expected Return = (B). Portfolio Variance