Consider the following information:

(a) What is the expected return on an equally weighted portfolio of these three equities?

(b) What is the variance of a portfolio invested 20 per cent each in A and B and 60 per cent in C?

State of Probability of Rate of returns if state occurs economy - state of economy- Equity A- Equity B- Equity C Boome 0.35 0.07 e 0.15 e 0.33 Buste 0.65 e 0.13 0.03 -0.06