Rate of Return if State Occurs
State of Economy	Probability of State of Economy	Stock A	Stock B	Stock C
Boom	0.74	0.09	0.11	0.15
Bust	0.26	0.13	0.13	0.11

Requirement 1:

What is the expected return on an equally weighted portfolio of these three stocks? (Do not round your intermediate calculations.)

11.25% 12.43% 12.31% 9.60% 11.84%

Requirement 2:

What is the variance of a portfolio invested 30 percent each in A and B and 40 percent in C? (Do not round your intermediate calculations.)

0.000503 0.000001 0.000001 0.000001 0.005000