Question: Please show all work! 8. (3 points) Consider the following information State of Economy Boom Good Poor Bust Probability of State of Economy .15 .55

Please show all work! 8. (3 points) Consider the following information

Please show all work!

8. (3 points) Consider the following information State of Economy Boom Good Poor Bust Probability of State of Economy .15 .55 25 05 Rate of Return If State Occurs Stock B 45 .10 .06 -,20 Stock A 35 Stock C 27 08 .04 .09 -.01 -.12 a) Your portfolio is invested 40 percent each in A and C, and 20 percent in B. What is the expected return of the portfolio? (1 point) b) What is the variance of this portfolio? The standard deviation? (2 points)

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