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Rate of Return if State Occurs State of Probability of Economy State of Economy Stock A Stock B Stock C Boom .20 .24 .45 .33
Rate of Return if State Occurs | ||||||||||||
State of | Probability of | |||||||||||
Economy | State of Economy | Stock A | Stock B | Stock C | ||||||||
Boom | .20 | .24 | .45 | .33 | ||||||||
Good | .35 | .09 | .10 | .15 | ||||||||
Poor | .30 | .03 | - .10 | - .05 | ||||||||
Bust | .15 | - .05 | - .25 | - .09 | ||||||||
a. | Your portfolio is invested 30 percent each in A and C, and 40 percent in B . What is the expected return of the portfolio? (Do not round intermediate calculations and round your answer to 2 decimal places. (e.g., 32.16)) |
Expected return | % |
b-1. | What is the variance of this portfolio? (Do not round intermediate calculations and round your answer to 5 decimal places. (e.g., 32.16161)) |
Variance |
b-2. | What is the standard deviation? (Do not round intermediate calculations and round your answer to 2 decimal places. (e.g., 32.16)) |
Standard deviation | % |
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