Expected return and standard

deviation.

Use the following information to answer the questions:

.

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

11% in asset J, 53%in asset K, and 36%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.

Return on Asset L in State State of Economy Boom Growth Stagnant Recession Probability of State 0.27 0.39 0.21 Return on Asset J in State 0.050 0.050 0.050 0.050 Return on Asset K in State 0.200 0.150 0.020 -0.060 0.300 0.200 0.060 -0.210 0.13