Expected return and standard

deviation.

Use the following information to answer the questions:

LOADING...

.

a.What is the expected return of each asset?

b.What is the variance and the standard deviation of each asset?

c.What is the expected return of a portfolio with

9%

in asset J,

49%

in asset K, and

42%

in asset L?d.What is the portfolio's variance and standard deviation using the same asset weights from part

(c)?

Hint: Make sure to round all intermediate calculations to at least seven (7) decimal places. The input instructions, phrases in parenthesis after each answer box, only apply for the answers you will type.

a. What is the expected return of asset J?

State of

Economy

Probability

of State

Return on

Asset J in

State

Return on

Asset K in

State

Return on

Asset L in

State

Boom

0.27

0.060

0.200

0.270

Growth

0.36

0.060

0.120

0.230

Stagnant

0.24

0.060

0.060

0.060

Recession

0.13

0.060

0.090

0.190