Requirement 1:

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

A.)15.29%

B.)15.44%

C.)11.47%

D.)14.71%

E.)13.97%

Requirement 2:

What is the variance of a portfolio invested 20 percent each in A and B and 60 percent in C? (Do not round your intermediate calculations.)

A.)0.005000

B.)0.000715

C.)0.000000

D.)0.000000

E.)0.000000

Consider the following information: Rate of Return if State Occurs State of Economy Boom Bust Probability of State of Economy 0.78 0.22 Stock A 0.21 0.11 Stock B 0.07 0.11 Stock C 0.17 0.19