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Rate of Return if State Occurs State of Economy Boom Bust Probability of State of Economy 0.72 0.28 Stock A 0.13 0.13 Stock B 0.21
Rate of Return if State Occurs State of Economy Boom Bust Probability of State of Economy 0.72 0.28 Stock A 0.13 0.13 Stock B 0.21 0.19 Stock C 0.17 -0.01 a. What is the expected return on an equally weighted portfolio of these three stocks? b. What is the variance of a portfolio invested 10 percent each in A and B and 80 percent in C
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