Problem 3 (15 points) State of Economy Boom Probability of State of Economy 30 .70 Normal Rate of Return if State Occurs Stock Stock B 30% 16% Stock B Stock 5% a) Calculate the expected return for stocks A, B, and C. 10% 7% b) Calculate the standard deviation for stocks A, B, and C. c) What is the standard deviation of a portfolio which is invested 45 percent in stock A, 20 percent in stock B, and 35 percent in stock C