Question: P13-10 Returns and Standard Deviations [LO1] Consider the following information: Rate of Return if State Occurs State of Economy Probability of State of Economy Stock

P13-10 Returns and Standard Deviations [LO1]

Consider the following information:

Rate of Return if State Occurs
State of Economy Probability of State of Economy Stock A Stock B Stock C
Boom .15 .30 .40 .31
Good .55 .17 .11 .10
Poor .25 .03 .06 .04
Bust .05 .10 .26 .07

Your portfolio is invested 26 percent each in A and C, and 48 percent in B. What is the expected return of the portfolio?

What is the variance of this portfolio?

What is the standard deviation?

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