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 0.70 0.09 0.21 0.21

Depressing 0.30 0.13 0.09 0.15

Requirement 1:

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? (Do not round your intermediate calculations.)

(Click to select) 15.60% 18.10% 27.63% 30.40% 9.87%

Requirement 2:

What do you expect the variance of your portfolio returns to be, if you invested 10 percent of your money in Tesla's shares, same proportion in Target's shares, and 80 percent in Toyota's shares? (Do not round your intermediate calculations.)

(Click to select) 0.008659 0.004159 0.006159 0.008359 0.000659

rev: 09_20_2012, 10_19_2015_QC_CS-21001, 03_30_2016_QC_C

Question

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	0.70	0.09	0.21	0.21
Depressing	0.30	0.13	0.09	0.15

Requirement 1:

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? (Do not round your intermediate calculations.)

(Click to select) 15.60% 18.10% 27.63% 30.40% 9.87%

Requirement 2:

What do you expect the variance of your portfolio returns to be, if you invested 10 percent of your money in Tesla's shares, same proportion in Target's shares, and 80 percent in Toyota's shares? (Do not round your intermediate calculations.)

(Click to select) 0.008659 0.004159 0.006159 0.008359 0.000659

rev: 09_20_2012, 10_19_2015_QC_CS-21001, 03_30_2016_QC_C