Use the following information to answer the questions: a.What is the expected return of each asset? b.What are the variance and the standard deviation of each asset? c.What is the expected return of a portfolio with equal investment in all three assets? d.What is the portfolio's variance and standard deviation using the same asset weights in part (c)?

State of Economy Probability of State Return on Asset R in State Return on Asset S in State Return on Asset T in State Boom 0.28 0.020 0.270 0.430 Growth 0.36 0.020 0.130 0.350 Stagnant 0.23 0.020 0.170 0.030 Recession 0.13 0.020 -0.040 -0.160

a. What is the expected return of asset R?

(Round to four decimal places.)

Part 2

What is the expected return of asset S?

(Round to four decimal places.)

Part 3

What is the expected return of asset T?

(Round to four decimal places.)

Part 4

b. What is the variance of asset R?

(Round to four decimal places.)

Part 5

What is the variance of asset S?

(Round to four decimal places.)

Part 6

What is the variance of asset T?

(Round to four decimal places.)

Part 7

What is the standard deviation of asset R?

enter your response here

(Round to four decimal places.)

Part 8

What is the standard deviation of asset S?

enter your response here

(Round to four decimal places.)

Part 9

What is the standard deviation of asset T?

enter your response here

(Round to four decimal places.)

Part 10

c.What is the expected return of a portfolio with equal investment in all three assets?

enter your response here

(Round to four decimal places.)

Part 11

d. What is the portfolio's variance using the same asset weights from part

(c)?

enter your response here

(Round to four decimal places.)

Part 12

What is the portfolio's standard using the same asset weights from part

(c)?