Consider the following information:

				Rate of Return if State Occurs
State of	Probability of
Economy	State of Economy			Stock A			Stock B			Stock C
Boom		0.20			0.38			0.48			0.28
Good		0.50			0.14			0.19			0.12
Poor		0.20		−	0.05		−	0.08		−	0.06
Bust		0.10		−	0.19		−	0.23		−	0.09

a.	Your portfolio is invested 22 percent each in A and C, and 56 percent in B. What is the expected return of the portfolio? (Round your answer to 2 decimal places. (e.g., 32.16))

Expected return

%

b-1	What is the variance of this portfolio? (Do not round intermediate calculations and round your answer to 5 decimal places. (e.g., 32.16161))

Variance

b-2	What is the standard deviation? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Standard deviation

%

Answer rating: 100% (QA)

Expected return on stock A ERA0200505500802501300865 or 865 ... View the full answer