Problem 11-10 Returns and Standard Deviations [LO 1, 2]

Consider the following information:

State of economy	Probability of State of Economy	Rate of Return If StateOccurs
		Stock A	Stock B	Stock C
Boom	.15	.356	.456	.336
Good	.45	.126	.106	.176
Poor	.35	.016	.026	.056
Bust	.05	.116	.256	.096

1) Your portfolio is invested 31 percent each in A and C and 38 percent in B. What is the expected return of the portfolio? (e.g., 32.16).)

Expected return of the portfolio:???????

2) What is the variance of this portfolio? (e.g., 32.16161)

Variance of the portfolio:?????????

3) What is the standard deviation of this portfolio? (e.g., 32.16).)

Standard deviation:?????????