Question: Problem 13-10 Returns and Standard Deviations [LO1] Consider the following information: Rate of Return If State Occurs State of Probability of Economy State of Economy

Problem 13-10 Returns and Standard Deviations [LO1] Consider the following information: Rate of Return If State Occurs State of Probability of Economy State of Economy Stock A and Stock B Boom .15 .31 .41 .21 Good .60 .16 .12 .10 Poor .20 -.03 -.06 -.04 Bust .05 -.11 -.16 -.08. a Your portfolio is invested 30 percent each in A and C, and 40 percent in B. What is the expected return of the portfolio? b-1 What is the variance of this portfolio? b2 What is the standard deviation?

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