Question
You decide to invest in a portfolio consisting of 10 percent Stock A, 60 percent Stock B, and the remainder in Stock C. Based on
You decide to invest in a portfolio consisting of 10 percent Stock A, 60 percent Stock B, and the remainder in Stock C. Based on the following information, what is the variance of your portfolio?
| State of Economy | Probability of State | Return if State Occurs | ||||||||||
| of Economy | Stock A | Stock B | Stock C | |||||||||
| Recession | .20 | 10.60% | 4.00% | 13.00% | ||||||||
| Normal | .50 | 9.90% | 10.76% | 17.40% | ||||||||
| Boom | .30 | 21.65% | 25.31% | 30.01% | ||||||||
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Fundamentals Of Financial Planning
Authors: Michael A Dalton, Joseph Gillice
3rd Edition
1936602091, 9781936602094
