Question: 10. Returns and Standard Deviations Consider the following information: Rate of Return if State Occurs Probability of State of Economy State of Economy Stock A

10. Returns and Standard Deviations Consider the following information: Rate of

10. Returns and Standard Deviations Consider the following information: Rate of Return if State Occurs Probability of State of Economy State of Economy Stock A Stock B Stock C Boom 1 Good .11 .02 .45 .10 .02 -.25 .33 .17 -05 -.09 Poor Bust a. Your portfolio is invested 25 percent each in A and C and 50 percent in B. What is the expected return of the portfolio? b. What is the variance of this portfolio? The standard deviation

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