State of Probability of Economy State of Economy Bust Boom State of Economy Bust Boom Probability of State of Economy 0.40 0.60 Calculate the volatility of a portfolio of 35 percent Roll and 65 percent Ross by filling in the following table: Note: Do not round intermediate calculations. Enter all answers, except the standard deviation, as decimals rounded to 5 decimal places. Enter the standard deviation as a percent rounded to 2 decimal places. 0.40 0.60 Security Returns if State Occurs Roll -10% 28 Calculating Portfolio Variance Portfolio Return if State Occurs Squared Deviation from Expected Return Ross 21% 8 op= Op= Product %

Calculate the volatility of a portfolio of 35 percent Roll and 65 percent Ross by filling in the following table: Note: Do not round intermediate calculations. Enter all answers, except the standard deviation, as decimals rounded to 5 decimal places. Enter the standard deviation as a percent rounded to 2 decimal places