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rate of return state of economy probability stock a stock b stock c boom 0.15 0.35 0.40 0.28 good 0.45 0.16 0.17 0.09 poor 0.30
| rate of return | ||||
| state of economy | probability | stock a | stock b | stock c |
| boom | 0.15 | 0.35 | 0.40 | 0.28 |
| good | 0.45 | 0.16 | 0.17 | 0.09 |
| poor | 0.30 | -0.01 | -0.03 | 0.01 |
| bust | 0.10 | -0.10 | -0.12 | -0.09 |
a. If you invest 30% in stock A, 40% in B, and 30% in C, what is the expected return?
b. what is the variance?
c. what is the standard deviation?
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Fundamentals of Multinational Finance
Authors: Michael H. Moffett, Arthur I. Stonehill, David K. Eiteman
5th edition
205989756, 978-0205989751
