Question
Rate of Return if State Occurs State of Economy Probability of State of Economy Stock A Stock B Stock C Boom .35 .20 .41 .25
| Rate of Return if State Occurs | ||||
| State of Economy | Probability of State of Economy | Stock A | Stock B | Stock C |
| Boom | .35 | .20 | .41 | .25 |
| Good | .25 | .11 | .16 | .15 |
| Poor | .20 | .03 | .13 | .02 |
| Bust | .20 | .17 | .20 | .11 |
a. Your portfolio is invested 30 percent each in Stocks A and C and 40 percent in Stock B. What is the expected return of the portfolio? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
b-1. What is the variance of this portfolio? (Do not round intermediate calculations. Round your answer to 5 decimal places.)
b-2. What is the standard deviation? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
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Financial statements
Authors: Stephen Barrad
5th Edition
978-007802531, 9780324186383, 032418638X
