Problem 13-9 Returns and Variances [LO1] Consider the following information: Rate of Return if State Occurs...
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Problem 13-9 Returns and Variances [LO1] Consider the following information: Rate of Return if State Occurs Probability of State State of Economy of Economy Boom Bust .68 .32 Stock A .13 Stock B .22 Stock C .40 .10 .04 -.08 a. What is the expected return on an equally weighted portfolio of these three stocks? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the variance of a portfolio invested 24 percent each in A and B and 52 percent in C? (Do not round intermediate calculations and round your answer to 6 decimal places, e.g., .161616.) a. Expected return b. Variance % 2.692999 Problem 13-9 Returns and Variances [LO1] Consider the following information: Rate of Return if State Occurs Probability of State State of Economy of Economy Boom Bust .68 .32 Stock A .13 Stock B .22 Stock C .40 .10 .04 -.08 a. What is the expected return on an equally weighted portfolio of these three stocks? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the variance of a portfolio invested 24 percent each in A and B and 52 percent in C? (Do not round intermediate calculations and round your answer to 6 decimal places, e.g., .161616.) a. Expected return b. Variance % 2.692999
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