Question: 9. Returns and Standard Deviations Consider the following information: a. Your portfolio is invested 30 percent each in A and C , and 40 percent

9. Returns and Standard Deviations Consider the following information: 9. Returns and Standard Deviations Consider the following information: a. Your portfolio

a. Your portfolio is invested 30 percent each in A and C , and 40 percent in B . What is the

expected return of the portfolio?

b. What is the variance of this portfolio? The standard deviation?

State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B Stock C Boom .20 .24 .45 .33 Good .09 .15 .35 .30 .10 -.10 Poor .03 -.05 -.05 -.09 Bust ..15 -.25

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