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You decide to invest in a portfolio consisting of 20 percent Stock A, 47 percent Stock B, and the remainder in Stock C. Based on

You decide to invest in a portfolio consisting of 20 percent Stock A, 47 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 Economy

Return if State Occurs

Stock A

Stock B

Stock C

Recession

.124

-11.10%

-4.50%

-13.50%

Normal

.685

10.40%

10.86%

17.90%

Boom

.191

21.75%

25.51%

30.21%

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