Question: Returns and Standard Deviations consider the following information: a. What is the expected return on an equally weighted portfolio of these three stocks? b. What

Returns and Standard Deviations consider the following information:

a. What is the expected return on an equally weighted portfolio of these three stocks?

b. What is the variance of a portfolio invested 20 percent each in A and B and 60 percent in C?

Probability of State of Economy State of Rate of Return if State

Probability of State of Economy State of Rate of Return if State Occurs Economy Stock B Stock A Stock C 75 33 .07 .15 Boom 25 .03 -06 Bust 13

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