You bought shares of stock from Tesla, Target, and Toyota. You feel like every year in the future will be randomly either "spectacular" or "depressing". Rate of Return if State Occurs State of Economy Probability of State of Economy Stock of Tesla Stock of Target Stock of Toyota Spectacular 0.74 0.09 0.27 0.19 Depressing 0.26 0.15 0.11 -0.07

If you bought an equally weighted portfolio of Tesla, Target, and Toyota shares, what return would you expect to receive every year on your stock investment?

What do you expect the variance of your portfolio returns to be, if you invested 30 percent of your money in Tesla's shares, same proportion in Target's shares, and 40 percent in Toyota's shares?