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State of Economy Probability of State Return on Asset J in State Return on Asset K in State Return on Asset L in State Boom
| State of Economy | Probability of State | Return on Asset J in State | Return on Asset K in State | Return on Asset L in State |
| Boom | 0.24 | 0.06 | 0.22 | 0.27 |
| Growth | 0.37 | 0.06 | 0.1 | 0.2 |
| Stagnant | 0.21 | 0.06 | 0.05 | 0.09 |
| Recession | 0.18 | 0.06 | -0.06 | -0.18 |
| a. What is the expected return of each asset? | ||||
| b.What is the variance and the standard deviation of each asset? | ||||
| c.What is the expected return of a portfolio with 88% in asset J, 54% in asset K and 38% in asset L? | ||||
| d.What is the portfolio's variance and standard deviation using the same asset weights from part C? | ||||
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