Question: 9. Returns and Standard Deviations. Consider the following information: 02 Probability of State of Economy State of Economy Boom Bust Rate of Return If State

9. Returns and Standard Deviations. Consider the following information: 02 Probability of State of Economy State of Economy Boom Bust Rate of Return If State Occurs Stock A Stock B Stock C .60 .40 .15 .03 .02 .16 34 08 What is the expected return on an equally weighted portfolio of these three stocks? a. What is the variance of a portfolio invested 20 percent each in A and B and 60 percent in C? b

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