Question
Rate of Return if State Occurs State of Economy Probability of State of Economy Stock A Stock B Stock C Boom .75 .08 .17 .24
Rate of Return if State Occurs
| State of Economy | Probability of State of Economy | Stock A | Stock B | Stock C |
| Boom | .75 | .08 | .17 | .24 |
| Bust | .25 | .11 | -.05 | -.08 |
A. What is the expected return on an equally weighted portfolio of these three stocks? (Answer as a percent rounded to two decimals)
B. What is the variance of a portfolio invested 20% each in A and B and 60% in C? (Answer as a percent rounded to two decimals)
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International Financial Management
Authors: Cheol Eun, Bruce G. Resnick
2nd Edition
0072318252, 9780072318258
