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

9. Returns and Standard Deviations. Consider the following information: State of Economy Boom Bust Probability of State of Economy 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? What is the variance of a portfolio invested 20 percent each in A and B and 60 percent in C? a. b

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