Problem 11-9 Returns and Standard Deviations [LO 1, 2]

Consider the following information:

		Rate of Return if State Occurs
State of	Probability of State
Economy	of Economy	Stock A	Stock B	Stock C
Boom	.73	.11	.05	.31
Bust	.27	.20	.26	.11

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.)
b.	What is the variance of a portfolio invested 28 percent each in A and B and 44 percent in C? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., 32.16161.)