You have a three-stock portfolio. Stock A has an expected return of 12 percent and a standard deviation of 37 percent, Stock B has an expected return of 16 percent and a standard deviation of 42 percent, and Stock C has an expected return of 16 percent and a standard deviation of 42 percent. The correlation between Stocks A and B is .30, between Stocks A and C is .20, and between Stocks B and C is .05. Your portfolio consists of 40 percent Stock A, 25 percent Stock B, and 35 percent Stock C. Calculate the expected return and standard deviation of your portfolio. The formula for calculating the variance of a three-stock portfolio is:

You have a threestoclc portl'olio. Stock A has an expected return of 12 percent and a standard deviation of 3? percent, Stock B has an expected return of 15 percent and a standard deviation of 42 percent, and Stock 0 has an expected return of 1E- percent and a standard deviation of 42 percent. The correlation between Stocks A and B is .30, between Stocks A and C is .20, and between Stocks B and C is .05. Your porttolio consists of 40 percent Stock A, 25 percent Stock B, and 35 percent Stock C. Calculate the expected return and standard deviation of 1,rour porolio. The formula for calculating the variance of a three stock portl'olio is: [Do not round intermediate calculations. Enter your answers as a peroent rounded to 2 decimal plaoes. Omit the "\"311" sign in vour response} of = IA2 of + 1'32 032 + x52 052+ ExAxgvoBGorrfRAJ RB} + EXAxCvoCGorrfRAJ RC} + Ergxcogoccorrfgcj Expected return a 'i-'i: Standard deviation m a 'i-i: Consider the following information: Recession .35 .94 Monnal .55 .15 .19 Boom 1D .1? .39 a. Calculate the expected return for the two stocks. {Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. l[Illnit the "it." sign in your response.) Expected Ietum forA Expected netum for B h. Calculate the standard deviation for the two stocks. {Do not round your intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Until the "it." sign in your response} Standard deviation forA Standard deviation for B 1. Standard deviation of your portfolio Variance= 0.014438304 Std. = 0.1201594------12.02%.........................12.02 2. Standard deviation of A R= .35*.04 + .55* .19 + .10 * .39 = 0.1135 Variance= .35(0.04-0.1135) ^2 + .55(.15-.1135)^2 + .10 (.17-.1135)^2 = 0.00294375 Std. =0.0542471187.................5.42%.....................5.42 1. Standard deviation of your portfolio Variance= 0.014438304 Std. = 0.1201594------12.02%.........................12.02 2. Standard deviation of A R= .35*.04 + .55* .19 + .10 * .39 = 0.1135 Variance= .35(0.04-0.1135) ^2 + .55(.15-.1135)^2 + .10 (.17-.1135)^2 = 0.00294375 Std. =0.0542471187.................5.42%.....................5.42