Question: 9. Returns and Standard Deviations Considerthe following information: Z' PROBABILITY RATE OF RETURN IF STATE OCCURS STATE OF OF STATE OF ECONOMY ECONOMY STOCK A

9. Returns and Standard Deviations Considerthe following information: Z' PROBABILITY RATE OF RETURN IF STATE OCCURS STATE OF OF STATE OF ECONOMY ECONOMY STOCK A STOCK B STOCK C Boom .15 .30 .45 .33 Good .45 .12 .10 .15 Poor .35 .01 .15 .05 Bust .05 .DE .30 .09 CHAPTER 11 Return and Rislc The Capital Asset Pricing Model w.mhhe.com/rwl a. Your portfolio is invested 40 percent each in A and C, and 20 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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