Question: Need help finding the variance! Consider the following information: State of Probability of State Rate of Return if State Occurs Economy of Economy Stock A
Need help finding the variance!
Consider the following information:
| State of | Probability of State | Rate of Return if State Occurs | |||||||||||
| Economy | of Economy | Stock A | Stock B | Stock C | |||||||||
| Boom | .66 | .09 | .03 | .24 | |||||||||
| Bust | .34 | .13 | .19 | .04 | |||||||||
a. What is the expected return on an equally weighted portfolio of these three stocks? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Expected return % b. What is the variance of a portfolio invested 21 percent each in A and B and 58 percent in C? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., 32.16161.) Variance of a portfolio
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
